A minor hole, or a money pit? (Photo: Fulton Homes)
I ran across a tweet the other day about Fulton Homes, a builder in Phoenix, Ariz., that appears to be successfully competing against the foreclosures that are prevalent in its market.
Part of its marketing strategy is a foreclosure cost calculator, which gives prospective home buyers who are considering buying either a foreclosure or a new house a list of the potential costs associated with each, so that they can make a realistic comparison. You can adjust the calculator for the condition of the house – good, fair, poor or wrecked. I questioned some of the numbers in their estimate – I thought the price for exterior painting, windows, and HVAC sounded low and I’ve done replacement cabinets and flooring for a whole lot less – but it’s a good starting point for doing some math.
They also showed they have a snarky sense of humor (a good thing, in my book) with the captions in this photo gallery of a foreclosed house in their market. It would cost a fortune to make that house livable again, which is a shame, because it looks like it was a beautiful home at one time.
You see the pictures and shake your head. Who would do something like that to a house? I don’t know – I can’t wrap my head around that kind of destruction – but I can personally attest to the wreckage that can be left behind after a foreclosure. When my husband and I were buying properties for rehab and resale, we looked at plenty of bank-owned properties. Some of them looked like the person took out his frustration with the situation on the house, smashing windows and punching holes in the walls and doors.
Some of the damage isn’t the previous owners’ fault, though. Foreclosed, vacant houses are easy targets for thieves, as we learned on one property we bought. As part of the disclosure, the bank told us the air conditioning unit had been stolen. Before we got someone moved in, we had two more units stolen, all for the $50 worth of copper pipe inside the unit. The second one was taken even after we bolted it to the slab and installed a metal cage over it. Thieves also broke in during the renovation and stole my husband’s brand new power tools and some building materials. They literally stole the kitchen sink. Every time it happened, it made that deal feel a little less great.
There’s no question you can get an amazing deal on a foreclosure. But you need to go into it with your eyes open and really do your homework, or you could wind up throwing money down the drain.
Readers: Tell us your stories about buying a foreclosure. Was it as great as you thought it would be? Did you wind up facing any unexpected challenges? Or did you shop the foreclosures and decide it was more than you wanted to tackle?—Pat Curry