Beware with Foreclosures

In Lexington Kentucky Real Estate, like many other areas, foreclosures are the talk of the town. But there are a few things to really be aware of. We discuss this online also at www.InvestSmarter.com and the article below sheds some interesting light on the foreclosure market:

Daily Real Estate News June 19, 2008

Avoid Pitfalls When Buying Foreclosures

Buying a foreclosed home is no cakewalk. It can be a sure-fire way to lose money for a purchaser who isn’t knowledgeable and careful.Here are some prime considerations for anyone wading into the foreclosure market.

Avoid outstanding liens. Make sure the property has a clean title. Any outstanding liens and fees incurred by the original owner will be transferred to the new buyer.

Bid conservatively. The market in many places is still depreciating. That unknown added to transaction, repair, and marketing costs could sour the deal.

Beware foreclosure concentration. Prices in neighborhoods where there are lots of foreclosures have declined the most – and prices in these areas are still declining. A buyer should confirm that there’s an opportunity to make money if prices fall another 15 percent.

Beware the appraisal. If the price is discounted from an appraisal done before August 2007, it is almost certainly unrealistically high.

Cash is king. Even a buyer with a renter lined up and enough money for a 20 percent down payment needs still more cash to weather another two or three years of a depressed market before unloading the property.Source: Forbes, Matt Woolsey (08/19/08)

These are just a few key points to investing in foreclosure properties. For more information on the Lexington Kentucky Real Estate market please go to the site.

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