Interested in Atlanta foreclosures? You better pay attention to this. Since I am licensed in a few markets and can access the MLS it is interesting when you look at a home that is currently in foreclosure, and go through the tax records. This is a pattern I noticed in general about searching for foreclosed homes that I thought worth sharing. I recently started to noticed a pattern of Atlanta homes currently in foreclosure that were just purchased as a foreclosure. It really jumps out at you because the sales are so recent. One trend is that I assume a person buys a home at what the feel is a great price just after the market shifts. It sells a year later and drops again in value. Before you go there...these homes are not mortgage fraud. These are foreclosed Atlanta homes where the purchaser bit off more than they could chew, and thought they were an investor but did not have any market knowledge whatsoever. They purchased the home thinking they were going to flip them in a short term and make a hefty profit. I turned down many listing earlier this year that I knew would be a total waste of my time, and I was right. A year later these investors are still on the market with no sale.
In the Atlanta area there are homes that I know that were sold several times in foreclosure since the last down market in the early 90's....they too go in an out of foreclosure. Some have major structual defects, and that is why they went into foreclosure to begin with. They were unsalable! When buying Atlanta foreclosures make sure you work with an Atlanta real estate agent that has a lot of demonstrable experience in buying and selling homes in Atlanta. If your do not, you will make a costly mistake. A lot of times, a buy is not a good buy!
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Yikes Jim! The perfect example of why buying a foreclosure blindly can get you in a lot of hot water!
Bill Gassett Metrowest Massachusetts Real Estate (RE/MAX Executive Realty)It is like the old saying...fools tread where angels dare not go. A few years ago I came across these investor groups from out of state. These are the most easily duped buyers Backus they do not know the local markets.
Rule # 1 Never buy investment real estate out of state.
How many people have watched these TV shows and think they can do it as well.
The other problem is straw buyers. There were a couple scams in Chattanooga with out of town buyers (real buyers) but there were kick backs from the builders and sellers.
Not related, there is a local flip negotiation company that packages sale transactions across the coouintry. The fee is very high. The buyer gets their downpayment back (in fact I am of the opinion that the down payment is straw and the buyer actually gets a fee for their purchase, can't prove that)
The company was using a local mortgage broker that was beginning not to be able to get the sales done, and sent me a couple rush applications.
There was no way - the prices were grossly inflated to cover the kick backs. The properties themselves were in locations with high foreclosure rates.
So complicating the market recovery - inexperienced investors, questionable flipping companies and practices, and/or outright fraud.
Are those repeat foreclosures concentrating in certain subdivisions or areas?
Richard
John Walters (Specialized Real Estate) I agree. Realtors should have a warning "DON'T TRY THIS AT HOME! WE ARE TRAINED PROFESSIONALS!"
Richard Smith - Mortgage & Home Loans - TN GA AL (American Acceptance Mortgage, Inc) Great insights...no these weren't straw buyers. In the 90's they were concentrated in a few areas, what bothers me now is I am seeing them all over. A lot of real estate spin makes you think of isolated incidents, these are not...they seem to be more common than even I would like to admit. I guess persons get deserate and think they are being creative.
Besides the obvious appraisal/loan fraud, many jump into real estate investing without knowing what they are doing and lose resulting in foreclosures. Sometimes the repairs cost 2x what the invester guessed, sometimes the investor fronts money to a contractor who never returns, sometimes the house gets finished but gets unfinished by the neighborhood thieves and an unrented or unsold house drowns the investor, sometimes the houses are purchased sight unseen by the investor who discovers there are $1,000's in needed repairs, many investors are unscrupulous making promisses and assurances to the buyer they know aren't true so they can make a quick $10k at the bueyrs expense, sometimes having to evict a couple tenants within a year will ruin the investor. A knowledgeable realtor can save a client a lot more money on the buy side than the commission will cost, but many buyers don't realize or appreciate it until they have lost their shirt on a deal. Penny wise and pound foolish. Those that shouldn't be in the business usually don't last too long and just don't let them take you down in the process!
People think all investors and realtors make a killing, but we know the truth that it takes a lot of hard work and a little luck to get ahead.
I could not believe my eyes when I read an article on AOL that mentioned some real estate agents in Atlanta were being fined because of the bad state of repair of their listings. Incredible. And I thought that all of the crazies were in Washington!
Ed DeChristopher, CRS©,Fredericksburg VA (RE/MAX Supercenter) Atlanta in more ways than one is in deep trouble.
I've seen the same thing happening in the Nashville market. I've found that it was over-eager so-called investors who bought the first foreclosure. Then they could not get out of the house when the flip did not sell so it's a second foreclosure. These new investors need to do more homework and know what they are getting into.
that's crazy Jim.
The poor house is like an orphan. Nobody wants it and it keeps getting past around.
Nashville Tennessee Area Real Estate Rhonda Burgess (Realty World Southern Living) I agre...I feel that is hte scenario. The foreclosure was purchased by someone thinking they got a great deal, but the home was still priced over market, and no other buyers wanted it.
Ron Avneri (Wachovia National Wholesale AE) Seattle, Wa (Wachovia/World Savings) LOL! The unwanted step child!