Posts Tagged ‘foreclosure pricing’

June Fletcher writes, in an article in the Wall Street Journal, about 24-year-old Brendt Montgomery. He shares his experience in purchasing a distressed property at a bargain price – or so he thought.

Here’s how his search started out:

After looking around for a day, he quickly found a condo that had been repossessed by the bank. He gave it a quick tour, made an offer and then embarked on a short vacation. While he was gone, a bidding war erupted, and spurred by the competition, he upped his bid to $143,100. His offer was accepted, and as soon as he returned, he signed a 33-page contract without really reading it.

Clearly one day is not enough time to search for a property – even if you’ve already logged hours with your internet search.

See what happens to him:

After paying $2,000 for an earnest money deposit, plus $250 for an inspection and $85 to the condo association—but before the deal closed–he again toured the condo.

There were problems: dirty carpets, mold in the air conditioning system, holes in the wall. He had second thoughts about how secure the first-floor location might be, and realized that the north-facing windows would never let in much light. “It was a little depressing,” he says. “I realized I’d acted hastily.”

The $8,000 tax credit is attractive, along with foreclosure pricing. But, to make sure it remains attractive, you’ve got to keep your head about you. (See previous post!)

tea

Originally uploaded by mohawk

Don’t get caught up in the bidding war frenzy that’s taking place in some parts of the country. You could lose your head.

Do your due diligence.

And have some tea and biscuits.