These days the words “bank owned homes” have become practically synonymous with a single word: “opportunity.” With prices and mortgage rates this low, first time home buyers, investors and seasoned property owners alike are looking at a raft of buying options unlike any Santa Barbara has seen in a very long time.
That option of buying a bank owned home has certainly opened a viable route for those looking to own a home at the fraction of what it cost just a few years ago. But not without a price: the best Santa Barbara bank owned home bargains are almost certain to fall into the ‘fixer-upper’ category.
When considering the purchase of one of our local bank owned homes, I’ve found that my most successful clients have a few qualities in common:
- patience – they wait until they’ve found a house that suits all their needs
- prudence – they resist the temptation to take out too big of a loan
- realism – they know how much hard work they will be willing to put into the house
Finding the right fixer-upper should be approached as a process: in other words, never buy the first home you see until after you’ve checked out some of its competition. There are more foreclosures on the market than ever – a phenomenon that works to your advantage. When you do find the right home, make sure to take out a loan that makes sense. Often people who are in a hurry to buy a house are tempted to take out a loan without giving enough consideration to its immediate and long-term implications. Being coolly realistic as you work out the numbers will pay off for a long time.
Once a bank owned home is officially yours, the hard (often fun!) work begins. Buying a home in need of repair has always been the surest way to find a deal, but it is also the way to improve or develop home maintenance skills, bond with family members, and keep a tight rein on the family budget. Here, too, you need to be careful not to get carried away– you don’t want to overbuild or overdevelop beyond what is appropriate for the neighborhood setting. In other words, keep your end goals in mind. My advice to clients varies depending on their individual needs: Is it an income property? Or the family home for the next 15 years?