DON'T
BE STUCK WITH A "TAJ MAHAL"!
When
reviewing new foreclosure properties notices or records,
compare the square footage of each subject property with
the average of all other properties within the same neighborhood.
Look for the properties that have a total square footage
equal to, or less than the "average for the neighborhood"
that the subject property is located in.
It
is always best to buy the smaller or smallest home within
a neighborhood, rather than the largest. Larger homes
may be indicative of the "Taj Mahal" syndrome,
wherein the structure has been overbuilt for the neighborhood,
e.g. a larger than normal addition or second level. The
smaller properties within a neighborhood will tend to
hold down the value of the "largest". This can
often cause a property to end up in foreclosure, wherein
the owner obtained a loan from a unwitting bank/lender
to build or expand his structure, and then when it came
time to sell, or when he faced tougher economic conditions,
he was not able to sell the property for what he put into
it. He is upside down!
Those
properties will usually go back to the bank/lender since
they are not worth the value of the loan(s).
Buying
the smaller or smallest home in the neighborhood, will
provide you with a higher "ceiling" market value,
established by the larger homes. With a little cosmetic
fix-up or needed repairs, you can typically enhance the
value of the property and yield a greater return on your
investment, by selling the home near the top of the market
value.
Shark
Bait - The foreclosure buyers software provides you with
an at-a-glance average: sales price; price per square
foot, and number of square feet; for all properties within
the same neighborhood as the subject property in foreclosure.
Within seconds, you can scan each property and determine
if it is overbuilt for the neighborhood.
We
hope this tip was helpful in your foreclosure buying efforts.
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