I was having a discussion with a friend last week when our conversation turned to the housing market. Bleak news upon bleak news for some people, but not for my friend.

Instead, he has been eagerly scouring the area for foreclosed homes and is of the mind to buy one or two at deeply discounted prices, fix them up, and selling each at a substantial profit. Though the local housing market isn’t as strong as it was just a year ago, people are in the market for a nicely kept ranch or colonial that costs less than $250,000, a price that is common in our area of the country.

On the surface, such an idea seems interesting especially since my friend knows how to fix just about anything and has an eye that can assess what it will take to get a home market ready. What our conversation also revealed was some inexperience in locating foreclosed homes and the best process to snag one at a price that was sensible.

Though I am no expert in the buying and selling of foreclosed homes, I have found some resources and tips to streamline the process, information I have forwarded to my friend and am willing to share with you as well:

Search Online — Several websites provide information about real estate owned (REO) properties, bank-owned foreclosures available where you live. Redfin.com, RealtyTrac.com and Foreclosures.com each feature listings of homes banks would rather not own. As the saying goes, “banks are in the habit of managing money, not property.” Therefore, if you do your research right you could offer the bank substantially less than the home’s market value especially when calculating the cost for repairs.

Repairs, Maintenance — My friend has an excellent grasp of what costs are associated with making repairs and has a good eye to inspect and find problems. Not every person in the market for a foreclosed home has that talent, necessitating that a home inspector be retained to help find these problems for them. In addition, a contractor will probably be needed to help oversee this type of project.

Use a Broker — Unless you have the skills to bid for a foreclosed home at an auction, you would be better dealing with a broker when searching for a foreclosed home. Some banks will only deal with professionals in the first place, while a broker can give you access where none would be available otherwise.

I do not know whether my friend will go ahead and snap up a foreclosure or two, but I have no doubt that he is now better equipped to handle this type of transaction if and when the opportunity arises.

Tags: foreclosure, home buy, home maintenance, home repair, home sell, real estate agent, real estate broker, real estate owned, REO

The condominium market has imploded over the past year or two thanks to a downturn in the overall housing market and overbuilding in many local markets. Complete condo projects remain unfinished in Miami with some nearby completed units half empty due to foreclosure and/or a failure to sell.

Bad news for one person could be good news for another one, particularly for the investor who wants to snap a bargain while the market remains depressed. But, condo living isn’t for everyone and when condo fees are included, that bargain can quickly yield some nasty surprises.

Unlike most other residential housing options, condo costs are difficult to predict long term. Certainly, both the house owner and the condo dweller must pay property taxes, insurance, and similar expenses, but there are other costs which tend to go up much faster than the rate of inflation, expenses which are added to condo fees.

Let’s take a look at the charges which drive condo fees:

Age of Building — Newer projects don’t have quite the overhead of older buildings, namely the need to update or overhaul old equipment, repair fascia, replace flooring, paint walls, you name it. Your particular unit may have been updated, but the common areas may need a refreshing or, worse, a complete makeover. You’ll be responsible for a portion of these costs which are frequently added to monthly condo fees.

Utilities — Everyone is paying more for gas, electricity, and water. Condo owners are responsible for their share of the building’s utility usage and these rates have gone up dramatically over the past few years. Add in garbage removal, recycling, landscaping, sewer, and related expenses too.

Insurance — You have insurance on your own unit, but the association governing your building has to insure the entire property. Condos close to the ocean or in major cities have seen their rates skyrocket. These costs, of course, are passed on in the form of higher condo fees.

Of course, buying a condo may be the only option for people who have to live in a particular area. If you are planning to buy, examine the financial documents closely before you sign. Learn how much reserves the condo association has on hand to cover planned maintenance including a new roof, elevator, pool, etc.

If the funds are insufficient, you can expect your condo fees to increase dramatically even before maintenance is needed. That $225 monthly condo fee could suddenly jump up to $350 or $400 per month, a figure that must be added to your own mortgage costs, insurance, and property taxes.

Most defintely, if you are planning to buy a condominium, condo fees are going up and, in most cases, at a rate much faster than inflation. Think before you buy!

Resources

7-Step Home Buying Guide

Home Buying Map (download)

Lending Calculators

Tags: common areas, condo association, condo fees, condominium, home maintenance, housing, pool, real estate, roofing

A water heater is the one appliance that gets no respect — until it quits working. Silently, almost effortlessly doing its job behind scenes, your home’s water heater faithfully provides the hot water you need for showering, running the dishwasher, and for cleaning your clothes. Only when hot water is absent do many homeowners remember this important device.

Yet, like so many major appliances, a hot water heater needs to be maintained or failure is certain to occur. You can extend the life of your hot water heater by following a regular maintenance schedule, a fifteen minutes (or less) process that should be done one to three times each year.

How To Maintain Your Hot Water Heater

Sediment build up is one of the biggest contributors to hot water heater failure. In areas where hard water is prevalent, mineral build up can reduce its efficiency, hastening the break down process.

You can reduce sentiment build up by lowering the temperature of the hot water heater to a more manageable 120 degrees. True, your dishwasher requires hotter water, but modern units contain their own heaters to bring the water temperature up to the required level.

Step By Step Instructions

Before you drain the sediment out of your hot water heater, you’ll need to turn off the water supplying the heater at the cold air intake. Or, you can shut off the home’s main valve. Gas-fired heaters require that you turn the temperature control to off while cutting off the supply of gas to the unit via the gas line. Electric heaters can be turned off right at your electrical panel.

Next, place a bucket under the drain and fill it up with water. Or, if you have a garden hose handy, attach the hose to the heater and drain it that way. With a bucket you’ll have to make several trips to dump out the water but with a hose you can drain the heater all the way at once. When the water turns clear, then you can close the valve, but you may need to turn on the supply valve for the cold water in order to clear out whatever sediment remains.

Once you are done, go ahead and close the drain valve and turn off the hot water faucet. Reopen the cold water supply valve and fill up the tank. Turn on the power only after the tank has been replenished by flicking on the power at the electrical box or reigniting the pilot light.

Extend The Life Of Your Water Heater, Save Money

Regular care of your hot water heater will ensure that you receive regular service for many years. Neglecting the device and you could shorten its lifespan and experience failure at the most inopportune time — like in the middle of your shower!

Resources

Home Decision Guides

Making Home Improvements

Remodeling Your Home

Tags: electric heater, gas heater, heater maintenance, home maintenance, hot water heater