Everyone is looking for a "Good Deal" on a home and are looking for a "steal". There are many factors to consider before deciding to purchase a foreclosed home. Here are things you should be considering:
1) When was the peak of the market? Charlotte Real Estate had a surge of demand after the hurricanes ravished Florida and the Gulf. A lot of new money started heading to Charlotte. Unfortunately much of this money was from investors which further superficially inflated prices.
2) When comparing the "list price", consider the price comparison date. Are you comparing the "current price" to a price during the "peak" or "before the peak"?
3) When was the neighborhood being constructed? Was it during the peak? If it was then the odds are there are many subprime loans (future foreclosures on the horizon) in addition to an unrealistic base line for prices.
4) Was this a starter neighborhood? A starter neighborhood is the least expensive neighborhood in an area. The least expensive neighborhoods were built with great intentions. The problem is that many of the borrowers were sub prime loans. There is destined to be more foreclosures. This means further devaluation.
5) What other factors attributed to the home values? There are other factors that could have occurred that decreased demand for a particular neighborhood. Was the area redistricted recently? Was there an assessment that increased the HOA? Did nearby development plans get approved or did nearby development plans get placed on hold?
6) Are there too many rentals in the neighborhood? In 2006 investors from across the nation swarmed on Charlotte NC. Investors were looking for easy money (many watch too much TV). Too many rentals will degrade the value of the neighborhood because a renter will not invest the time and money into a home that you will. Neighborhood value is based on the impression a buyer has of the neighborhood. Are the lawns mowed? Is there junk in the yard? Are there any broken windows? Cars in the grass? These are all indications. many of these homes are being lost in foreclosure but it will take time before the neighborhood will recover.
7) How many other distressed sales are in the neighborhood? This includes recent sales and More foreclosures means decreasing values (at least for now). The values will eventually rebound.
8) How to determine value? Value is a challenge in a changing market. First and foremost, only buy a home that you really want to call home. The greater Charlotte region will continue to grow. We have a great climate and a friendly southern atmosphere. There is no way of knowing when the homes will begin to appreciate once again. It will happen and then you will realize the value of your purchase.
9) How do I purchase a home with a lot of equity? This is a problem because when you purchase the home at a discounted price you have just devalued the homes in the neighborhood. This will impact the neighborhood appraisals for 3 to 6 months down the road. You have effectively purchased the home at market value because the price you paid is the price a willing, ready and able person is willing to spend in that neighborhood.
10) How do I get a home equity loan for repairs? This is a huge problem at this time. Banks have learned that they can not afford to give home equity checks for more than 80% of the home's value some will go a little higher but none will give 100%. This is what created this financial crisis to begin with. In addition, your price is the market value. You often need an independent source of funding such as cash or a family loan.
I will do everything possible to help you make a wise investment. There are a multitude of other considerations and we have just touched the tip of the iceburg. Call me, Rick Waite, at 704-770-6559 today to find that ideal Charlotte home.
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