What’s The Big Deal With All The Deals?

Most people agree that buying something under priced is the name of the game. How much fat can you trim before you start getting to the muscle, bone, or until it’s severed off? Time will tell with today’s talk about foreclosures and REO's. Everyone I run into asks if they saw this week’s list of sold foreclosures. Or if I saw the latest listed properties that are priced so low, people are offering more than the asking price to purchase the property. Has it ever dawned on you that the banks understand the deal with deals? Price them low enough and people won't be able to resist the deal, bailing them out of the mess they created for themselves.

I have seen them. I have heard about them. I have thought about what those people are actually buying, and I figure that people are glad because they got a deal. The deal made it fun, not the fundamentally sound choice for purchasing, or the likelihood of the returns that property will make in time to come. Like Louie has said before, “When you go to Macy’s and the signs say 40% off, what does that really mean? It means that you are paying 40% less of the marked up price.” In other words, how much was that marked up in the first place?

Looking at home prices throughout the East Bay Area within the last few years, the markup was incredibly high. Although prices are becoming affordable again, the homes that are marked way down, even though they are still overpriced, are like the clothes you find at a Goodwill store. No one else wanted them so they get rid of the inventory at below clearance prices.

Be weary of missing fixtures, dead landscaping, broken windows, or holes in the wall because often, this is what people are buying. So the big deal about today’s deals is that you got a deal. The deal is to say to one another, I bought this home for only $__ thousand dollars is all most people can brag about. On the other hand, this is the correction of the over valuated housing market. And, it has provided some good buys for the few smart purchasers.

The point of all this is that don’t buy a foreclosure to say you’ve bought a foreclosure. Make sure the bank owned property fits your need; financially and not emotionally. Be sure that the property fits comfortably within your lifestyle and tolerance level. I sure know I don’t want the deal in one of America’s ghetto’s for $135,000…I can tell you that much right now. That might be a steal, but I don’t know if I would want to go there and sleep, let alone visit. Consider what you are buying, what you intend to do with the property; and if you have the tolerance to put up with your “deal.” Sometimes a deal isn’t the deal you’re looking for. Be selective and find the right purchase for you, albeit a new home, one a few years old, or a REO/foreclosure.