As I said in Vol 1 and 2, "When purchasing a home, noticing the small things about a certain property can save you a ton of money."
The spectrum for this to be taken into account for is large and can be the difference in the quality of the building materials in different luxury homes, and also the wear and tear that different older homes have gone through. For this post we will look at foreclosures and the three things to look for that can cause a huge difference in listing price to actual market value, when in all actuality they are things that are small and very inexpensive things to fix.
In this market many buyers are really trying to take advantage of the situation the market is in and purchase properties priced signifacantly below the market value that are not "pretty" and need a little "TLC". In all honesty I truly believe this is where the really good deals are. The ones that are not "move in ready" will be priced significanly better than the ones that are. This is especially true when the bank or corporation that owns the property is not willing to do a few minor things to make the property more marketable. When comparing different properties there are specific small things that you should take notice of as a buyer. Some will need more work then others obviously, but many times those small items could make a big difference in the amount of equity you have when you get finished doing them.
Dirt and clutter spread through out the property is usually one of the major things that can cause a foreclosure to be priced low. Remember though that a cleaning company can be hired for a few hundred dollars that will come a do a full top to bottom clean job. When I say top to bottom I truly mean it. There are plenty of companies that are willing to do some major cleaning for a reasonable cost. These complete clean jobs will cover things like wiping down all the base boards in the house, along with all of the window sills and trim work around the home. It could mean sweeping the ceilings to get rid of cobwebs, and any collected dirt. It will also include wiping down the cabinets and inside the shelves and drawers, and cleaning the carpets and windows will also be included.
The next thing to think about is paint. A badly painted home or dirty and scratched up paint can cause a foreclosure to be priced low. The quality of the paint job on the interior of the property can affect the attractiveness of the home to any potential buyer for sure, but it is amazing what a coat of fresh paint can do. Let me say that again. When the property has pealing paint or messed up wallpaper, many times banks or corporations will opt to lower the price of a home drastically to attract a buyer rather than pay to have it painted. This can be a huge benefit to a buyer who is willing to spend the time to paint it themselves. The difference in price that a home is listed for vs. what it is worth fixed up can be sizable just because the property needs a little paint.
The third thing to pay attention to is the ceilings, especially in the bathroom, above the shower. Many times the ceiling above a stand up shower in a foreclosure will appear to be falling down. This can be very distressing to a buyer who is not aware that this is only a small problem. The humidity rising from the top of the shower can often cause the "popcorn" to fall down and become detached from the sheetrock behind it. I have seen it many times, and in all actuality it is not a hard problem to fix, it can be resprayed for a very small fee and made as good as new with very little cost or time.
The ability for a buyer to purchase a home at a good deal vs. at a "steal" can often lie in the buyers ability to notice the small things. You can take advantage of the lower listing price on some of the foreclosure out there just be being able to look at a property and see past the very cosmetic things that are often the cause of the lower price. The cleanliness of a property, the freshness of a the paint on the wall, and the popcorn on the ceilings of the bathroom can be the the three things to notice that can help you purchase a home at a favorable discount to market value and save you a ton of money in the long run. The properties that have the three things will often be sold at a lower price based on the fewer number of buyers that are willing to purchase a home that has these problems.