Market Conditions in 32225>Question Details

Rebecca, Both Buyer and Seller in

Will I gain instant equity in a forclosed home that I might buy?

Asked by Rebecca, Fri Feb 20, 2009

I am looking to get information on the home sales and value of homes in the 32225 area of Jax. We lived there three years ago and are planning on moving back. If we sell our current home here in the northern subs of Chicago and take a loss of about $45000. Will I be able to get it back in equity from a home I purchase in Jax at forclosed price of about $200000 or less(this home would of been sold in 2006 for $300-350000). I need to convince my husband that in the end we will come out on top.

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GREAT QUESTION:

Your business plan for selling a home purchasing a home does have merit.

Determine equity of a home based on your purchase price and appraised value of home. If there is a difference in these two values yes you would have equity in a home however all is on paper.

Example: Investor of mine
Purchase a home: $675K
Certified Appraised value $1. 5 Million

His net worth on paper increased at closing close approx. $1 million

NOTE:
There are many home owners after speaking with CPA determine the write for loss on tax returns and plus purchase of a home with equity there are tax advantages.

Many investors search for homes below market value wait for home value reach max. then sale property for profit.
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0 votes Thank Flag Link Fri Feb 20, 2009
Good Day,

The impact of the move will be pretty mimimal, or may even help you. What I mean is that selling and buying will have no net impact, if you have equity and don't have to leave cash at the closing. Same as buying and selling in a rising market would be.

You might help your situation, but you need to sell your existing home first. Then you can decide how much time to spend looking for a home here. You might want to rent for a while, been happening a lot.

Regards,
Blaine

904-874-0814
blaine@blainerabe.com
0 votes Thank Flag Link Fri Feb 20, 2009
Equity is a figment of your imagination, there is no such thing until it is realized. Lets suppose you buy the home and think you have equity in it, What can you do with it? Nothing .

If you are buying up, that could be a good choice because the lowerpriced home has gone down in value and the higherpriced home has lost more value, that could be a good choice.
0 votes Thank Flag Link Fri Feb 20, 2009
Rebecca,

On Short Sales you can expect to have 10-20% equity in the home. Foreclosures may be more. Of course that all depends on the condition. It is possible to find short sales and foreclosures in decent condition, but you will most likely be competing with other offers and in this situation you are still getting an amazing deal, but you might expect to pay more than the asking price. This is normal in Jacksonville with 3/4 of all sales being distressed properties. I think the word is out on th egreat deals here. Most of the homes will need some work and appliances, light fixtures, paint, and carpet. so you will buy the home less than market value, but you will be putting some money into the home. But when you are buying at the bottom of the market, and have a low interest rate, you can expect that your home will appreciate at a normal 3-4% each each year. If you are planning to stay in Jacksovnville at least 4-5 years it's is defintely money well spent.
Just an example I had a customer that bought a home in Mandarin fro $165,000. It appraised at $190,000 in it's current condition. The home needed appliances, paint and carpet, but after repair value was over $200,000. This was a foreclosure. I hope this helps you and your husband to make a decision about buying a home in Jacksonville. Also, for the past 4 months consecutively our sales have been increasing. good luck on selling your home up there and if you have any further questions email me anytime.
CC Underwood
0 votes Thank Flag Link Fri Feb 20, 2009
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