by Melissa Burden | The Flint Journal
Sunday November 16, 2008, 12:57 AM
You've seen the foreclosure notices posted in the windows of your neighbor's home.
And while they're certainly nothing to gloat about, to many people scouting for a great housing deal at an affordable price, foreclosures pose a boon.
Foreclosure sales continue to drive the local real-estate market and likely account for more than half to 60 percent of the houses selling here, said Mark Dickens, director and chief executive officer of the Flint Area Association of Realtors.
The good news: Year-to-date association sales --ย which primarily cover Genesee County -- are up 18.6 percent (4,782 compared to 4,033).
The bad: The average sales price is down 22.9 percent ($84,773 compared to $109,969 through the same time in 2007), Dickens said.
"Most of these homes are selling for about 60 percent to two-thirds of what their peak value was in 2005," said Randy Haney, broker/owner of Flint Township-based American Associates Inc. Realtors and Builders.
Foreclosures are popular and are attracting the likes of not just investors, but people who you normally wouldn't think of us home buyers.
Someone like Jessica Coblentz, 18, a 2008 Davison High School graduate.
Coblentz works as an assistant for INCA Realty in Flint Township and bought her first home, a foreclosed three-bedroom Cape Cod in Richfield Township, earlier this year.
She closed on the deal right after her graduation open house.
Coblentz said she wasn't looking to buy a home, but came across a foreclosure listing just a few blocks from her parents' house.
She paid $47,500 for the roughly 1,600-square-foot home that needed some cosmetic work. She was able to roll the closing costs into a mortgage totaling about $52,000.
Coblentz may be young, but she knows a deal when she sees it.
The house recently appraised for about $88,000. It had sold for $142,000 in 2001.
Now, while many of her friends are living in apartments, she's paying about $570 a month total -- "pretty much the same as they are," she said -- for a house payment, insurance and taxes.
So how can you find a foreclosure?
One way is to simply look around and pay attention to what's happening in your own neighborhood.
Secondly, filings on homeowners who have defaulted on their mortgages and are heading for foreclosure are listed in publications such as the Flint-Genesee County Legal News.
There also are several Web sites that list foreclosed properties. Realtors also have access to foreclosure listings on the multiple listing service database.
Ann Fotenakes, a real estate broker for Signature Real Estate Ltd. in Flint Township, buys foreclosures herself and said her office runs daily searches through the MLS for about 10 people looking for such buys.
So now that you know where to scout the potential deals, what else should you expect if you're interested in buying a foreclosure?
โ€ข Buyer beware: Not all the houses are in good condition.
Some may have been sitting vacant for six months or longer. And they might have flooded basements or burst pipes, or interiors pilfered and left a mess, area Realtors say.
"They'll take light fixtures. They'll even take things that are new, such as a furnace," said Haney, who lists Countrywide Financial and Wells Fargo Home Mortgage foreclosures.
Haney said in one foreclosure, someone removed half of the kitchen countertops and cupboards.
"(Potential buyers) want to expect there's going to be some expenses," Haney said. "Sometimes it's real obvious."
To safeguard yourself, order an inspection on the property at your own expense. With foreclosures, this generally occurs after the bank accepts your offer.
Despite the horror stories, area Realtors say some foreclosures are nice and need minimal, if any, repairs.
"Just because it's a foreclosure, it doesn't mean it's in bad shape," said Wilson Lahoud with INCA Realty in Flint Township. "Some are in move-in condition, as well."
• You may have to wait longer to get an answer on an offer. Patience is key, Realtors say.
Fotenakes said depending on if a bank owns the property and where the bank is located, clients sometimes wait a few days to up to three weeks to hear whether their offer was accepted.
That differs from traditional owner-occupied sales where you likely hear back from the seller or seller's real estate agent the next day.
• Your offer may not be accepted.
Some of the hot foreclosures are garnering multiple offers, meaning yours might not be the winner.
Lahoud said you should give your best shot with an offer the first time.
That's because, unlike in a traditional sale, a bank doesn't always counter the offer. They may just reject it.
To make an offer, be sure to have a pre-approval letter from a mortgage company or bank saying you can get a loan, or proof of funds if you're making a cash offer.
Lahoud said if you don't have the letter in hand and find something you like, you may have to wait two to three days to get the written pre-approval. And that might be enough time to lose out on a deal.
A cash sale at least may go faster than those that require financing.
Bob Prusinski, 63, of Flint is scheduled to close on a 1,000-square-foot, three-bedroom ranch foreclosure later this month in Flint Township.
Prusinski is paying $17,000 for the house that sold four years ago for $94,000. He said he's rolling another $10,000 in needed repairs into a special 203(k) mortgage offered through the Federal Housing Administration.
Prusinski, a retired postal carrier, said the home needs a new furnace and he'll repair the bathroom and kitchen and paint the interior.
He said the process is taking longer than expected (he put his offer in in early September) because he had to answer numerous questions for the mortgage approval. He also had to get contractor quotes for the repairs, which had to be approved by the underwriter.
"I feel I'm getting a very good buy of the house," Prusinski said. "Secondly, down the road I believe the property I'm buying is going to appreciate after the housing crisis subsides."
