Fixing Up or Selling As Is: Relevant Considerations

As in just about everything except scuba diving, it doesn't make sense to go overboard when fixing up a home to sell.  BUT, certain fixes may pay for themselves several times over in terms of attracting offers and getting maximum value.  Inman columnist Dian Hymer explains this well in Fixing to sell: Don't go overboard | Inman News. -David

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Foreclosure Properties and How to Buy Them

A number of people have asked me how to buy a foreclosure property. Of course, the answer begins with "that depends," because foreclosure is a process with several stages through which distressed properties may pass, including:

• Short sales (usually during pre-foreclosure) 
• Last minute fire sales (seller trying to extract a little bit of equity before the property is lost to foreclosure) 
• Foreclosure auctions (bank has just acquired possession and is trying to sell "on the courthouse steps" in order to avoid carrying the property on its books as Real Estate Owned (REO, a nonperforming asset from the perspective of a bank) 
• REO (foreclosed property) sales, after the property has been taken onto the lender's books, the bank having now decided to list and sell the property 
• HUD homes, repossessed by the government.

The the answer is different at each stage, and of course there are other ways to acquire distressed properties not involved in the foreclosure process (such as trust sales, cash for keys, etc.).

A big factor is location.  Where foreclosure properties are scarce, bidders are many (60 at a recent trust auction I attended), meaning any bargain achieved by the buyer will be relatively small, and the risk of bidding too much is great.  Where foreclosure properties are plentiful, you're generally dealing with a depressed marketplace, meaning that prices will be low but so are the prospects for near-term appreciation.

And of course nearly all distressed properties, including foreclosures, are fixer-uppers.

Here's a good overview by CNN Money on the topic of foreclosure-related distressed property sales:: How to buy a foreclosure - May. 4, 2010.  For more info, contact your real estate blogger! - David

Fix or sell as is?

Now that's a fixer (click for photo source)!!!

Whenever it's time to sell a home, the "fix or sell as is" question comes into play.  The trick is to make sure the home won't be remembered for what is wrong with it, for what doesn't fit into the neighborhood, for what was over-personalized.  - David

For more info: Avoid home improvement gimmicks that hammer resale value Inman News

Don't try these improvement projects at home - MarketWatch

From shows on the DIY network and on HGTV, you could get the impression that the majority of homeowners love to purchase fixers and spend every weekend on enormous home improvement projects.  Well, it's more like 5%, but the value of making the right improvements to your home is definitely there.

I say the right improvements because

Groucho's Place

Not all properties lost value between 2007 and 2010! The 6000+ square foot Trousdale Estates home originally built for Groucho Marx was purchased in 2007 for $4.675 million but listed for sale last August at $12.9 million! That being a little rich, it was eventually reduced to $9.85 million and sold early in February for