• December

    5

    2012
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Issues with Distressed Properties

Issues With Distressed Properties.

 

A for-sale house that’s been unoccupied may look like great bargain, but costly problems often prowl inside homes that have been vacant for some time and therefore buyers should be more careful. A home can become unoccupied due to a marriage, job transfer, and loss of a family member or other life experiences. But vacancies today are more often result of a bank foreclosure or short sale in which the lender agrees less than the mortgage total. The most vital concept to realize before going into the foreclosure market is to know that, owners who couldn’t cover the payments anymore gave up these properties. In these cases, the house is often inadequately maintained – In reality, if the owner can’t cover the payments, he or she is expected falling behind on paying for regular maintenance as well. Also, some people who are forced into foreclosure become disillusioned by their circumstances and take out their disappointments on their home before the bank repossesses. This often includes removing appliances and fixtures, and sometimes even complete vandalism. After the occupants leave, foreclosures sit abandoned, which bring about criminal action.  Maintenance and cleanliness can be a dilemma in foreclosure properties because of the conditions under which the previous owners moved out, and because of the duration the house may have been vacant. Some of the key issues consist of:

Issues with water leakage
A small leak under the kitchen sink can turn to a mold crisis, and a roof leak or ruptured pipe can turn to major water damage. When there is not anybody to deal with these small obstacles as they happen, small obstacles can lead into big ones, and eventually turn into a big disaster.

Lack of Basic Maintenance
If the former owner could not pay for their mortgage payments one can expects no payments made to fix the water leaks and other damages that are part of the basic maintenance.

Dirtiness Issues
Bank-owned properties are sometimes unbelievably dirty because of duration taken sitting vacant deliberated ignorance by the previous owners or occupancy by vagabonds. When the space is locked up with no air flowing for months, built-up grime can make the whole house to smell.
Renovation problems the prior owners may have made modification to the home without getting the correct permits or hiring good labor in order to save money. A general case in point is changing the garage into living space so more people can live in the house and assists pay the mortgage. These changes may be disadvantageous to future owners or cause troubles for the new owners with city government officials in regard to the lack of appropriate permits.

Electricity dilemma
When there are no occupants in the house, the electricity may be off unless the bank has purposely kept it on. It can rather be difficult to see what you are purchasing in some rooms, mainly basements and windowless bathrooms with the lack of electricity.

Issues With the Purchase
If you are able to fix issues that most people do not want to cope with, you can buy a home at a major mark down. Regardless of all these possible problems, foreclosures can still be a good deal. However, you may come across further problems when it comes to essentially purchasing the house and getting it in move-in state.

Problems With Lenders
Buying a home from a lender has its problems as a consequence of the increased degree of bureaucracy and the limited transparency afforded to those who buy foreclosures.

Financing
Lenders will not provide you with the financing for a home they believe to be rundown or that appraises under the purchase cost. If you have cash then this would not be a problem specially being an investor.

Time Delays With the Owner Bank
one might think that banks should want to get rid of foreclosures as fast as possible, but in actuality banks usually take a longer time reviewing bids and throughout the escrow process.

No Seller revelation
people from the bank are unlikely to have any information of existing issues with the house since they have not resided in it.  You have to discover the issues either through home inspection and asking around the neighbors or by simply from the experience of living there.

Competition
Since foreclosures can be great deals, they are appealing to investors looking to turn over properties or utilize them as rentals. Investors bids are more appealing o the band than those from future homeowners because they can make all cash offers with fewer or no contingency and a faster ultimately a faster closing.  You can make money from foreclosure homes, but you should know what you are getting into ahead of time and select your property mindfully. Don’t neglect the essentials that make a house attractive just because the purchase price is a good deal.

Eco Custom Homes has over 30 years of experience in the construction and reconstruction of intown Atlanta homes.  If you have a client that is thinking about a purchase of a distressed property, we are happy to offer a builder’s inspection of the property, and give you a quote on repairs that may be needed.  To schedule an appointment send us an email at info@ecocustomhomes.com or call at 404 303 7280.

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Costs of Custom Homes

The first thing most people want to know is: What does it costs to build a 3000 sqft custom home in the Atlanta, GA. market?  The first thing you have to calculate is the square footage you want.  Once you have that, the numbers below give you a good starting point.

Adjusted Square Foot Calculation:

New Construction:

Renovations:

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