Rising foreclosures (default notices, scheduled auctions, and bank repossessions) spell some opportunity, but today’s REOs (real estate owned, but literally: lender-owned) aren’t the bargains they were during the Great Recession. In 2008, REOs rose to over 2.3 million units, while today there are only about 380,000 units. 

You’ll have fewer choices, more competition, and less desperate pricing, so here’s what you should know: 

• REOs are typically sold “as is”, meaning no repairs.
• Some REOs can’t have home inspections.
• Renovations and repairs may be costly.
• You may pay some or all of the seller’s closing costs.
• Any liens on the property will fall to you to pay.
• REO auctions often require a hefty deposit then payment in full by certified check or cash.

There are several ways to find foreclosed properties and upcoming auctions.  

• The county tax assessor, or county sheriff’s office.
• HUDforeclosed.com
• Buying a HUD home from the government. You’ll need to hire a HUD-certified real estate broker and a HUD-certified lender. To browse for homes, click here.

Further questions? Ask your Berkshire Hathaway HomeServices network agent for assistance.

Home remodeling is notorious for costing more than homeowners initially planned, for many reasons, including:

1. Products and services may cost more than expected.
2. Supply chain interruptions and new tariffs may cause additional expenses.
3. Demolition may reveal problems like mold, out-of-code wiring, or a damaged sub-floor.
4. You upgrade to more expensive products and appliances after work begins.
5. The cheapest contractor may underbid to get the job, then cut corners or hit you with higher invoices later on.

As you can see, some costs are beyond your control, so it’s smart to build an extra 25% into your budget before work begins. Other ways to manage your budget are to:  

• Check the condition of the most expensive systems, like HVAC, electrical and plumbing.
• Concentrate on living rooms, kitchens, and bathrooms.
• Choose updates that bring the most bang for your buck: floors, countertops, cabinets, appliances and fixtures.
• Bundle upgrades, like new insulation to go along with new windows.
• Keep your existing floor plan.
• Choose classic, durable materials, like hardwoods and stone.

Stick to the above advice and your home will look great—and so will your finances.

Real estate transfer taxes are a one-time fee—a deed transfer tax—in reality. They are based on the purchase price of the property when it changes ownership. Charged by some states, counties, or cities, these non-federal fees are paid by the buyer or the seller or split between the two.

Also known as documentary stamp taxes or state documentary fees, the amount owed for real estate transfer fees varies widely. Due on closing day, or close of escrow, the fee can be as low as $50 on a $500,000 home in Colorado, or as high as $3,500 for the same home in Florida. 

Unlike estate and gift taxes, real estate transfer taxes aren’t paid to the IRS. They’re paid to the taxing authority that levied the tax. In the case of inherited property, sometimes the tax could be reduced or waived if the recipient uses it for a primary resident.

If you’re buying property out of state and want more information, contact the state’s legislative or government website for property statutes.

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