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Archive for July, 2010

The Get Rich Quick Gene

imgres The Get Rich Quick Gene

As Published in The Seattle Times/ New Homes Saturday

by Al Doyle

“Get Rich Quick.”  It’s a topic that sells books, videos, lectures and seminars.  I guess the peope to teach us how to get rich quick are actually the ones who do get rich off us.  Recently a favorite cocktail party conversation has centered around making a killing by buying a foreclosed or short-sale home.  In theory it sounds tempting, but in reality, the prospects of profiting from the misery of others is something best left o the IRS.  In the Puget Sound market and around the country the inventory of foreclosure and short-sale homes is large and has influenced the entire housing market, new and used, by lowering prices to right around the 2005 levels. Let’s take a look at what it means to take a swim in this pool of distressed housing.  First of all some terms.  A foreclosed property is one that a lender has taken back through a legal process and now holds title to and need to sell to recover their losses.  A short-sale is an offer made to a seller for an amount less (or short) that what is owed to the lender, and therefore the lender has to approve the sale.  It is generally thought that because of the distressed position of the lender, foreclosed or short-sale homes should be great deals.  In reality this is far from the truth.

The truth is shopping for a foreclosure or a short-sale property is not pretty!  There are a few things you might want to consider before you start your search.

§       Do you have a lot of time to search for your home? To find a true bargain takes weeks and weeks of effort.

§       Are you EXTREMELY patient?  Once you find a home you are interested in, it can take weeks or months for the financial institution to respond to your offer.

§       Can you afford the time and possible “lost opportunity” of placing offers on multiple foreclosed properties, hoping you get one?

§       Do you like risks? Foreclosed and short-sale properties often have major hidden defects.

§       Do you have lots of cash to repair a foreclosed home?  Will you have to buy appliances and window coverings?  Will you have to replace stained carpets or refinish floors? This all adds up.

§       Are you willing to take on legal hassles if there are other liens on your new property that may not be easily known?  More cash out of your pocket!

§       Is this strictly and investment for short-term gain, or do you want a place where you and your family can live and enjoy?

My experience indicates a brand new home is a far better option, particularly now with prices at a great level and record low interest rates increasing buying powe.  Here are some of the reasons I suggest home shoppers consider new.

§       New homes are a great value

§       You know what all the costs are before you sign

§       You know who the seller is

§       There is no hidden damage or destruction

§       You won’t face repairs, replacements or cleanup before move-in

§       You can choose your finishes, options and upgrades, and finance it all with one loan

§       New homes are usually in new and up-coming neighborhoods

§       New Homes are energy efficient saving you operating costs for years to come

§       Most new homes have great builder warranties to protect your purchase

§       You get a certain closing date and don’t have to wait around (sometimes months) for lender approval.

The “Get Rich Quick” motive has never been a good reason to buy a home.  It’s not about a fast buck, it’s about a having the home of your dreams, a place to live you are proud of, in a location that’s right for you.  Today would be a very good day to start looking for a new home

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