Foreclosed properties proving not to be worth risk right now
CHAMPAIGN – Some area real estate agents are getting calls from prospective buyers wondering how to buy a foreclosed home, according to Barb Manka, president of the Champaign County Association of Realtors.
But at least one real estate agent who has bought foreclosed homes and fixed them up is no longer doing so because of the soft market.
"The retail market is soft. This is not a great time for doing that sort of thing," said Chris Badger, who did 35 rehabilitation projects from 2001 to 2007. "The time will come again as the market rebounds and the inventory goes back to normal ranges."
Badger said by the latter part of 2006, he noticed the housing market was changing even though sales numbers didn't show it.
"With the rising inventory, it was taking longer to sell," he said.
"This is not the time to be flipping properties, but when I started in 2001, no one was rehabbing homes. Then the TV show, 'Flip This House,' started, and by 2006 and 2007, everybody was doing it."
Badger said it might be practical for people to do "a slow flip" if they buy property and are willing to hold it five to seven years.
"What we do see is buying a lot of homes to hold as rentals at this point," he said.
"Short sales" are the biggest trend at this point, Badger said. That's when a lender accepts less than the full amount owed in order to allow a property to be sold.
Badger said the National Association of Realtors estimates that 18 percent of sales fit that category, but Badger thinks it's a smaller portion here, perhaps one in 10.
