Large retail chains make good neighbors
A continuation of the column two weeks ago … some keys to making money in today’s market.
Q: Is a smart retail chain betting on the neighborhood’s future?
A: Large retail chains spend a lot of money researching where to put their stores. They generally try to select neighbors that are on a long-term economic upswing – which is a good sign for local real estate prices as well.
Examples: I have never lost money buying real estate in neighborhoods where Walgreens pharmacies were going in. New CVS and The Home Depot stores under constructions also are good signs.
Q: Are young wealthy families moving in alongside older homeowners?
A: When prosperous young families start moving into neighborhoods previously populated by older people, home prices are likely to increase. These young homeowners tend to pour money into maintaining and upgrading their homes, and they vote in favor of spending on schools. Drive around on weekends, and look for neighborhoods where new BMWs and children’s bikes are replacing older cars and older couples.
Q: Foreclosures.
A: Some of the best real estate bargains are in homes facing foreclosures (sorry to say we are there). The owners must sell fast or lose their homes to lenders. In many cases you are helping the owners out of a very stressful situation. If you stop the foreclosure process while the home is in “preforeclosure,” you could help save the owner from a black mark on his/her credit record.
Notices of pending foreclosures are available at county courthouses. Contact the owner of a home facing foreclosure in person or by mail, and politely say that you might be interested in buying their home if they decide to sell. Search for properties where the homeowner has some equity in his home, not those with mortgages and liens in excess of the property’s value. (Have a title company research whether there are liens on the property before you buy it. Expect to pay $100 to $200 for this service.)
However if a home is over leveraged (more is owed than it is worth – there is a lot of this in this market) in today’s market, you have a good chance of doing a “shortsale.” That involves offering the lending institution less money that is owed on the home. For information about short sales go to www.foreclosurelisting.com.
Q: Bank sales.
A: Another alternative is to make offers on “real estate owned” (REO) properties – those that have been repossessed and now are owned by the bank. With real estate prices falling, many banks are so anxious to be rid of these properties that they are willing to accept offers 20 percent to 30 percent+ below market value. Visit the REO Networks Web site (www.reonetwork.com) to find brokers in your region that specialize in REO properties.
Helpful: Buying foreclosures makes the most sense if you have some handyman skills. Foreclosed homes often require significant repairs because owners who expect to lose their homes rarely bother to maintain them.
Have a real estate question? Write, call, fax or e-mail:
Bob Jeffries, Realtor
Century 21 Birchwood Realty, Inc.
4040 Del Prado Blvd., Cape Coral, FL 33904
239-540-6659 Office 239-542-7760 Fax