According to the notice, 11 states — including Virginia — offer this program. For more information, visit www.realtor.org/government_affairs.

If anyone out there has used, or tried to use, this option, please comment or write us so we can share your experience.

I’m not an accountant, mortgage broker, attorney or any other type of financial advisor. I just saw this info and wanted to share it. If you want to take advantage of this option, you should get professional help–maybe start by asking your mortgage broker.

Here is an example of how easy it is to entangle yourself in all the many elements of a renovation. These are all changes we’ve made to one of our current properties. No doubt the future buyer will be ecstatic about all of the lovely changes and updates we’ve made…but before you buy a fixer upper, ask yourself whether this is something you can handle on your own. If so, more power to ya! If not, why don’t you give us a call to see what already-renovated properties we might have available.

We added a sliding door at the back of the house where the windows used to be located, because we got rid of the original rear door. We got rid of the original rear door so we could put in a new shower for the new luxurious master bathroom in the new master suite, which we created from a large unusable existing room. The renovation of this room required raising up the floor level to match the rest of the house, which caused us to re-design the structural posts and piers supporting the floor joist system. We had to run the plumbing through this joist system and create an access to it from the crawl space, causing more structural issues to deal with before getting the framing inspection approval. Oh, and to make the master suite nice, we cut through the brick walls to add two windows in the bedroom and one in the bathroom to make the space light and airy for the new buyers.  And I’m not even going to get into the cost of all these changes…

Now do you have an appreciation for renovation cause and effect?

After our personal experiences dealing with elderly family members, we decided to go the extra mile to make the whole suite handicapped accessible. We created a shower that has no step-over threshold. In the event a buyer or family member is in a wheelchair or requires a walker, they won’t have to worry about rolling or stepping over the threshold to get into the shower. For future needs, there is wood blocking installed in the framing of the walls for hand rails and a shower seat.

Having wheeled many a stretcher into homes during my long career in the fire department, we decided to install 36-inch wide doors to the master bedroom and bath in the event the suite will be used for an elderly or infirm resident. You’ve got to start thinking about these things as you get older, or reach the age when you find yourself caring for aging parents.

This foresight adds a bit more time and effort up front of course, but we know how much of a difference it can make to someone’s quality of life in the future, which makes it a no-brainer!

She then said the words that will stick with me for the rest of my life: “Thanks for selling me your property. I looked at a lot of houses before finding yours. Every one I saw had too much wrong with it for me to handle with my situation of available cash, approved mortgage amount, and housing need. You gave me the chance to put the housing part of my life back on track with no major worries.”

Wow.

All I did was buy a property right from the bank, fix it up like I would have if my family would be living there (within reason), and sell it for a reasonable market price. Since that experience I’ve continued to march on, looking for rough bank-owned properties to fix and sell to good folks like Jan. With my skills and experience and good crews, we can make a living and make a difference in the lives of home buyers. I guess that is a good thing.

This blog isn’t really about me though. From my 35 years in the trades and the real estate renovation, repair, and investing  business, I’ve picked up a few bits of knowledge. The previous story was my wake-up call to reach out and help those who don’t have the resources I do — to help them determine if a property is really a good deal and how to make it a nice home. Even for those folks who do have the skills and resources, if I can give them one tidbit of info that saves them a few bucks or a lot of aggravation, that’s cool with me.

So until the next time we converse, be an educated, savvy, fully-aware home buyer. Realize that the banks are trying to clean up the mess they made and don’t really care much about your situation. And remember, most agents are motivated by commission and will not be there for the almost-certain problems you will run into with buying a run-down property.

Don’t get so caught up in the hype of getting a “deal” that you get the shaft. Know what you are really buying. Remember that the banks and their agents don’t put all of that “as-is” language, etc. in the listing and contracts because they love you. BUYER BEWARE!!!

While out looking for homes one day, they stumbled across my street sign and website. When the parents came by the house and it was still under construction, they immediately called Jan and told her “We found your house.” They called me and asked what seemed like a million questions about all the renovation work we planned to do. They were good questions, particularly from people not in the construction business. They told me their story of seeing so many properties, and the poor condition the banks were trying to sell them in.

Once Jan and I talked, we struck a deal for a little less than what the neighborhood homes were currently selling for by owner-occupants. She even paid me more than the negotiated price in order to get the appliances upgraded to exactly what she wanted. With all the work we did, it was still an older home. But, the place was in true move-in condition and fixed up just as she wanted.

Jan, as a single owner with no renovation experience, did not have to worry about plumbing issues, appliances, windows, bathrooms, flooring, the hot water heater or heat pump…the list goes on. The house was a true deal for her, unlike all of those other nasty foreclosures she saw. Since it was already well-renovated, she was able to get over the first year of so of being “house poor” before deciding whether or not to change other things in the house — which would then be optional and not major repairs.

Check back on Monday for Part 3 of Jan’s buying a foreclosure experience: The Closing

Well, over the past year I realized that not everyone has had the good fortune of cleaning up really nasty properties and transforming them into vibrant, nice homes for a new owner/family. What really opened my eyes was the experience of working with the buyer of one of my investment properties.

Let’s call her Jan: a single woman in her early thirties who was going through a lot of life changes at the time we met. After selling her beautiful home to move on to a new life, a few things happened that drastically changed her plans. One major plan was to find another home to live in. She had temporarily moved in with her parents after these unfortunate incidents occurred, but we all know how difficult that would be after being on our own for a while.

So with the market for foreclosures growing in the area where she wanted to live, the family went seeking a good bank-owned foreclosure deal. My, how did their eyes open and frustration grow with this process. Many of us know the difficulty of shopping for a big ticket item like a car, selecting a college, engagement ring, a house to rent or own, etc. According to Jan, finding a deal on a bank-owned foreclosure home was definitely not as easy as she expected it to be, even with the large number of foreclosures around today.

She and her family were dragged around by real estate agents from one junky house to the next. Many of the houses were good prices, but they could barely get through the front door without encountering the smell of animals or the presence of major mold. The damage found at the houses they saw ranged from significant to major: kitchens were old and in many cases, nasty; the cabinets were worn out, falling apart, and greasy to the point that not even a professional cleaning would make a difference; appliances were old and beat up, or not working at all.

All the “great foreclosure deals” they saw seemed to get worse and worse: bathrooms were falling apart; heating systems weren’t maintained; windows were broken, old or damaged; light fixtures were broken or missing; mold was rampant. Each time, they heard the usual story from the real estate agents: “It will only take a few thousand dollars to fix the place up.

Check back this Friday for Part 2 of Jan’s buying a foreclosure story.

Here is what I see from being out there every day looking at properties. The banks lent on all kinds of houses, both new and old. Many of the newer properties that are now bank-owned are in need of minor repairs: paint, carpet, a door here, a window there. You should always remember the saying “buyer beware,” as things like appliances, heating and air conditioning systems, roofs, gutters, garage door openers, and water heaters can go bad even in a newer house. But if you are handy, or have a brother-in-law like the guys on This Old House, you are probably good to go.

Unfortunately, most foreclosure homes are fixer uppers. If a homeowner was unable to make their mortgage payments, they probably weren’t able to pay for all of the necessary repairs or upgrades to their properties either. Sometimes when people realize they’ll be losing their home, they just give up and stop putting any more money into it, letting the problems with the property’s condition just compound. In the worse case scenario, they may even trash the house on purpose out of anger or frustration.

So here you are, all excited about getting a deal on a foreclosure. It is an old house and kind of had a rough life, maybe even some abuse by the previous occupants. Yeah, it is a little dated and the layout is a little obsolete, but your real estate agent told you it will only cost about $20,000 to make it a place of your own. Since you paid such a low price for the house, the extra money isn’t a problem. Piece of cake!

Ever had sheetrock or plaster dust with your morning cereal?

Ever cranked up the hot water for your morning shower before your long commute to work and got a blast of cold water? Come home exhausted from your day in the trenches, faced with ripping out the rest of that wall you thought was going to be a breeze? How about hauling the plastic bags of construction debris to the landfill in your Prius? But remember, it is only $20,000 to fix the place up, no big deal.

The fact is, choosing a fixer upper foreclosure means investing not only money but a lot of time and effort into a home that is not move-in ready. The renovations will take nearly all of your free time, and you’ll be living in chaos in the meantime.

If you’re willing to put up with all of these things, buying a foreclosure directly from the homeowner or at a bank auction may be the perfect choice for you. If money is the most important factor, you will certainly pay the lowest price going this route. If the value of your time and your quality of life are also factors — like they are for the many people we work with — consider purchasing a foreclosure home from a responsible investor. You will still pay much less than the market price for the house, but all of the repairs and renovations will be completed so all you have to do is move in to your new home.

All real estate investors are not created equal, and you should be careful when evaluating the quality of their work and selecting who to do business with. But that is another whole article…