One couple's brush with foreclosures

I'm assisting a young couple in the process of buying their first home. They currently rent in Fitchburg and work in Madison. They've decided they would like to focus their home search in the city of Evansville, located to the south of Madison in northern Rock County. Why Evansville? They are looking for more home value in exchange for a longer commute and higher commuting costs.

We recently toured 5 starter homes together in Evansville, and it turned out that 2 of the homes are foreclosed homes owned by banks. One home is owned by Countrywide. The Countrywide home is only a year old, with vaulted ceilings, an open layout, tile flooring, a gas fireplace, and a modern feel. A great home in many ways.

Unfortunately, when we went to the basement we found standing water in several spots - even though it had not rained in a few days. Some of the water was due to a leaky pipe from the kitchen above. The other puddles were due to seepage in the foundation. In fact, we found more than just water entering the house from the outside. In one spot there was actually a large amount of dirt and sand that had flowed into the basement through the space between the foundation wall and foundation floor.

Foreclosed home #2 is owned by a local bank. This home's warts were apparent from the time we entered the home. There were cobwebs in the doorway, the carpet was stained, and the home was in need of a thorough cleaning throughout. Similar to the Countrywide home, the basement had serious water problems. The water had been recently removed from the basement, but the smell of mold was everywhere. We could see mold growing in one spot, but most of the drywall in the basement had been recently covered up with new wainscoting and new wood trim. My buyers were left wondering what was underneath the new wainscoting. They had seen enough.

The homes we've covered above are representative of a lot of bank-owned homes. The owners don't have an emotional investment in the homes; the properties are one of many in a portfolio of other foreclosed properties. Most of the homes are vacant, and many of them don't receive the level of care and oversight they need to ensure they are properly maintained - and ready to sell in the current buyer's market. As a result, many of these properties sit on the market until someone gets realistic about what it will take to get them sold.

Yes, foreclosed homes represent an opportunity for finding a good home value, but there can be a lot of work and patience that goes into finding the right home, in the right location, in the right condition, at the right price. We'll spend more time on this topic a little later in the year.