Posts (RSS)Tours of Repo Homes in Chattanooga Rising
The tour bus strategy of marketing repo homes is now being replicated in Chattanooga. As foreclosed properties account for almost 45 percent of total home sales across the country, more and more real estate agents and brokers are shifting from selling new and non-foreclosed existing homes to selling repo homes and many of them are now using tour buses and vans as part of their marketing strategies.
In Chattanooga, ReMax broker Aaron Shipley has organized Deals on Wheels tours to bring prospective homebuyers to view dream homes and real estate investors to look at money-making opportunities in repo homes.
The repo homes represent broken dreams to the American families who lost them to foreclosures; but they also represent the fulfillment of dreams to first-time homebuyers who have saved money to buy their first homes at lower costs.
Mortgage lenders typically lose about $50,000 in every foreclosure auction that they file and complete, so they want to lessen their losses by selling their repo homes quickly at discounted prices to lessen their property management costs.
Real estate agents and homebuyers alike acknowledge that not all distressed homes are profitable. Many of these foreclosed properties need costly repairs because they have been heavily vandalized. But for skilled investors and homebuyers, there are opportunities for savings and profits.
Real estate agent Brandi Thompson related she bought one of HUD repo homes in Chattanooga in 2008 for $86,000, which was later appraised at $139,000 because it included a big garage and a basement. After making some repairs, she now has a rental home that gives her monthly income.
According to foreclosure tracking firm RealtyTrac, foreclosure filings soared 81 percent in 2008 to 2.4 million units. The firm’s senior vice president Rick Sharga said he expects more foreclosures in 2009 due to the rising unemployment rate. Foreclosure and job loss studies have shown that one home foreclosure results from every 6 to 10 jobs lost. Sharga also said more repo homes will flood the market when lenders increase monthly mortgage payments in loans structured with low initial rates but high subsequent rates.
Chattanooga real estate broker Cindy Walker, division manager for Crye-Lieke Realtors, said more first-time homebuyers and investors are looking at bank owned repo homes and now buying homes because of the low prices, low mortgage rates and the tax credit of $8,000 offered to families buying homes for the first time.