Real Estate Misconception, Mystery and Myth, in that order.

By: Alan Aptheker

Three false assumptions we make about real estate. Some things we just know to be true, can either be a misconception, a mystery or a complete myth. 

Real Estate Misconception, Mystery and Myth, in that order.
My old boss told the same joke a thousand times. We got so sick of it, it actually hurt to laugh. Here it is: If it walks like duck, and talks like a duck, it could be a goose. [laughter].  She was trying to tell us not to be so quick to assume. (Why didn’t she just say that). Here are three assumptions, one of each type: a misconception, a mystery and a popular myth.

Misconception: a foreclosure is a bargain. It’s an easy way to get a house for a steal.
Many foreclosures cannot even be viewed by the public. If they are, you may find a hostile homeowner at the door to greet you. Typically, there’s a big repair bill in your future, and if you can’t even get inside to see the extent of the broken or damaged mechanical systems, your estimate for the cost of repairs may not even come close. Good rule of thumb -- bid 70% of the market value, and rely on a reputable Realtor®  to tell you what that is. There could be liens, from the HVAC company, the roofer, etc., and you must pay them to clear title. 

Mystery: Why aren’t all Short Sales the greatest bargain on the block?
The chance of a bank’s short sale “debt forgiveness ratio” being the same as it was two years ago are slim. Your bank would take a bigger hit then, than they will today. The pipeline is so huge, that banks have upped the ante, just because they can. The days when banks would be pleased with 60 cents on the dollar have passed. Look at the statistics for what banks will accept. Even more mysterious -- there is a positive correlation between lowball offers to a bank and lost paperwork.