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CONSIDERING FORECLOSED PROPERTIES? Roll Up Your Sleeves, and Be Patient!

TO QUALIFIED HOME BUYERS, FORECLOSED HOMES OFFER PLENTY OF UPSIDE, BUT HARD WORK USUALLY REQUIRED!

Tragically, Illinois Foreclosures are up nearly 42 percent from May, 2007.  That translates to incredible heartache and misfortune for some, but opportunity for others - those looking to buy, fix up, and perhaps re-sell these distressed properties.

According to RealtyTrac, foreclosed homes totaled 9,670 across IL in May, 2008 - up 15% from April.  From these, nearly 3,000 have reverted to ownership by the bank.

Some are available at very attractive prices.  Those priced lowest, however, are usually priced that way for a reason, according to experts.  Common sense tells you that considerable work must be completed to make the house even habitable, if the price is very low.

Unoccupied bank-owned properties (called REO's, for Real Estate Owned) often have broken windows, frozen and burst plumbing pipes, mold, and water damage.  Some contain squatters - and they can smell pretty bad if they don't contain working bathroom facilities.

Generally, the homes in the worst condition attract professional contractors experienced at heavy renovation.   Often, electrical wiring needs to be replaced, as does plumbing, windows, and the roof.  For most who plan to clean up and occupy the foreclosed home, those requiring less work is usually the better option.

As a rule of thumb, the more attractive the property's location and condition, the less likely the bank will offer price and repair concessions.  Those in challenged locations, and in rough condition, usually allow for greater discounts from the bank owner, especially if the bank has held the property for an extended period of time.

There are several websites that offer lists of foreclosed home, most for a fee.  ChicagoForeclosureReport.com is one Dean's Team Chicago uses to identify and research distressed properties the day after the foreclosure action is first filed with the courts.  Often times, contacting the seller BEFORE the bank takes back title to the property will allow for easy price negotiation, directly with the seller - although, to be sure, the process involves some patience, and persistence.

Our Team often searches MLS-Listed distressed properties by searching keywords in the Listing Remarks copy.  Terms such as "Corporate Owned," "As-Is," "Bank Approval Required," or "Short Sale," indicate pending or completed foreclosure.

Usually, stellar credit credentials, or cash, is required to purchase a foreclosed property.  However, the FHA offers a special loan program, through selected lenders - its 203k program - to provide financing for initial procurement of the property, and for rehab, construction, and repair.  Click the FHA website here for more info on their 203k program.

Read Mary Ellen Podmolik's story in last Friday, June 27th's Chicago Tribune for more info.

DEAN MOSS & DEAN'S TEAM CHICAGO

Posted: Wednesday, July 02, 2008 7:53 AM by Dean's Team

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