Wednesday, June 10, 2009

Buy a house in foreclosure

I bought a house 2 years ago which was in foreclosure.

This was before the "buying a foreclosed home" became commonplace.

I didn't set out to buy a foreclosed home, what I wanted was something cheap which needed a rehab.

When you are looking for a home, these are the things to think about.

1) Buy something you can live in for 10 years.

Don't count on being able to sell it in 3-5 years if you want to move. You may not be able to recoup your investment if there is a downturn (like we just experienced).
I bought a house in New Jersey in 1991. It did not increase in value for the first 5 years I owned it. Then in the late 90's it started increasing, and by the time I sold it, the value had almost doubled.

2) Know the traffic.

When I bought in New Jersey, I looked for one year before I bought, going out every Sunday, looking at various towns which were within a good commuting distance. I concentrated looking in one particular town because I knew the traffic backed up on the highway, and I if I lived in Hasbrouck Heights, I could exit before I got stuck in traffic.

I knew someone who bought a house because it was on the front cover of a realtor magazine. It was a beautiful house, but only after they moved in did they realize the road it was on was a short cut to avoid the main road. Therefore they had much more, and noisy, traffic than they expected.

3) Think about flooding.

When I bought my house in New Jersey I didn't really think about this, but my house was on a hill so I did not have a problem.

I was lucky. One year there was a lot of rain, with a town a few miles away flooding quite badly. Looking at that town one would never have suspected could flood as it did. I think it was one of those 100 year floods - but, they do occur.

4) Think about your neighbors

Good neighbors are the best thing to have. Sometimes I am not always the best neighbor. I don't have the perfect lawn, and I even got a complaint from my neighbor in New Jersey because I had an old beat up trash can that she had to look at outside her kitchen window.

That is probably one reason I bought my next house in more of a "bohemian" area.
The only problem is once in a while there is loud music, and some loud cars, but not so much.

5) Buy a house you don't have the urge to knock down walls

This became my motto when I was house hunting. I have been through some remodelling, and I really enjoy many aspects.

However, I have learned, once you start knocking down walls, the remodelling never ends. It's always "well as long as we are doing this.... let's do that".

I am trying to keep my cost in my new "bungalow" as low as possible. I am learning to live with things I might prefer to have changed. It's possible.

I absolutely hated the upstairs bath in my New Jersey house. But, after a few years, it grew on me, and I kind of started liking it - at least a little bit.
Well, let's just say I didn't hate it.

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