This is an article from CNBC that actually came from the New York Times.

The basic premise is that people who are underwater in their current mortgages are walking away from their homes.  Once their value falls below 75% of the amount owed on the mortgage- people walk.

It is a horrible thing for Americans to even have to consider things like this- and even worse that stories like this are common in modern media.

As is customary in America, there is always someone looking for the upside in the gloom of the current real estate market.

Enter the vulture- the bottom feeder- the person who isn’t looking to buy a property… the person who is looking to steal it.  This is the buyer who is looking at foreclosed property.

A person who is looking for a foreclosure isn’t usually a customer at Capstone Homes.  We only sell new homes at the Delaware beaches- and our new homes in the Milton area are typically built to the individual tastes of a specific buyer.  Someone who is looking to purchase bank-owned property isn’t going to be looking at Delaware new homes.

The catch is VALUE.  Someone who is looking at a foreclosure is someone who is (wisely) seeking a great value on a home.  That’s not a bad thing- Capstone Homes believes that our new homes in Cannery Village and Holland Mills are some of the greatest values in any Delaware Beach home you can find.  We think our combination of great floorplans, great communities, quality construction and energy efficiency is a winning combination.

Is a Capstone Home a better value than a foreclosure?  Who knows- what I do know is this…

If someone is going to walk away from a home- how well is that home going to be maintained?  A foreclosed property may have a low purchase price- but the cost of ownership may not be that low at all.  When you buy a home “as-is”- the cost of ownership could actually be much higher than a new home from Capstone Homes.

If you want a great value on a great house- come to Capstone Homes.  We don’t have prices like the foreclosures, but we do have great value.

I just returned from the International Builder’s Show (IBS) in Las Vegas, Nevada.

Nevada is one of the epicenters of the real estate crash.  I picked up a real estate magazine at a shopping center, and it was full of listings.  The entire publication was bank owned property.  It blew my mind.

There are some great deals with bank owned properties.  A bank owned property is something that has been through the foreclosure process- and it is now bank owned.  The banks call this property REO- (“Real Estate- Owned”)- and there are deals if you can find them.

Short Sales are something else- this is where the bank is working with the homeowner to sell the property for less than the amount of the mortgage.  Banks will do this in certain circumstances to avoid the cost of the foreclosure process.  These can be great deals- but the process is challenging.  We recently spoke to a Realtor who put in a bid for a client on a short sale- the offer was rejected two months after it was submitted.  That’s tough- wait eight weeks only to hear that your offer is rejected.  Short Sales are very tricky.

If you are in the market for a new home- should you look at a new home?  Should you look something bank owned?  Short sale?

The answer depends on a few factors.  The first is the real estate market in which you are looking to purchase a home.  The number of foreclosures varies dramatically from region to region.  Keep in mind that 3rd quarter foreclosure rates for Nevada were 1 in every 23 homes.  The rate in delaware was 1 in 500 homes. The point is something this blog has said over and over- there is no national real estate market.  The only market that matters is the one in which you want to own property, and that market could be in much better or worse shape than what you hear on the news.

So, if you’re looking for a new Delaware Beach Home- or you are looking for a Delaware retirement community- foreclosures can be much harder to find than you might imagine.  Short sales can be a even tougher home to find.

Second- buyer beware.  Bank owned property is sold “As-Is”.  Chances are, the bank doesn’t know what’s wrong with it (if anything), and they aren’t going to sign anything that represents the condition of the home.  They also will not usually agree to a home inspection clause in the contract (which is standard in the Capstone Homes‘ purchase agreement).  If you want it- buy it cheap, but you get what you get.  It could be in perfect shape- or it could be a mess.  Sometimes the part of the home that is a mess isn’t easy to identify.  If something is wrong with a foreclosure, you will have no way of holding the bank accountable for the problem.

You are getting a great price- but along with that price comes the risk.  It’s simple risk and reward.

On the other hand- the real estate crash has brought home prices down considerably- builders of Delaware new homes like Capstone Homes are making deals that may be the best in a generation.  We build a high quality home, and we stand behind our new home.  Our homes are going to be some of the most energy efficient homes in the Delaware Beach area, and you have the opportunity to build your Capstone Home to your tastes.  A new Capstone Home may cost more than a bank owned property, but it can provide the exact home you want.  What’s the price of living in your dream home?  It might be a better value to purchase what you want from Capstone Homes.