About Defiance County, OH

Foreclosures...Risk vs. Reward: Part I

Foreclosures... you've seen them by the hundreds each and every week appearing on the national news outlets and the Defiance county sheriff's auction site. You've also heard exciting stories from late night infomercials and the typical friend of a friend who got a great deal, but are foreclosures really the bargain that we perceive them to be? This week's article is the first of a two part series on foreclosures. This week, I will lay out some of the basic facts about buying foreclosed properties at auction and, address a few of the most common misconceptions.

Each month in Defiance county there are several properties auctioned off on the sheriff's steps. In fact, at the time of this writing, the sheriff's website has eleven properties to be auctioned off in just the next two weeks.

The first thing that must be understood, is these properties can be bought at the sheriff's auction, but most likely not for the 2/3rds appraised value. It's true, if someone wanted to purchase one of these properties at the auction they can do so but, the property will most likely be bought back by the lender who is holding the loan on the property no matter what the sheriff's appraised value is on it or the 2/3^rds amount is. This is because the lender is trying to protect their interest in the property. For example, if the home has an appraised value of $50,000 but there is a mortgage of $55,000 on it then the bank is most likely going to bid up to $55,000. If however, the same property only has a mortgage on it of $30,000 then the lender will only bid up to that amount. In either scenario whoever bids highest will get it. Through thorough research potential buyers can discover what is owed on the property, as well as, any liens that may be on it. Thus, discovering what kind of a deal might be made.

Secondly, you must understand the requirements and risk factors in order to buy a home at auction. One must have everything in place to follow through with the purchase. For instance, the purchase cannot be contingent upon getting a loan, getting an inspection or contingent upon the buyer selling their home. The buyer must be willing to purchase the home "As-Is" without inspecting it first and then have the resources available to purchase it. This is very important to remember as the home comes with no warranties, comes with only a sheriff's deed and the purchaser is not allowed to inspect the property prior to bidding.

Through proper research, knowledge and ability to meet the purchasing requirements and a good understanding of the risk factors one can find some great purchasing opportunities at sheriff's auctions. But, a miscalculation in just one of these areas can result in tragic financial consequences for a purchaser. These are just a few of the different nuances that one faces in the purchase of property at a sheriff's auction. If you are someone who enjoys higher risk challenges, then buying a home at a foreclosure auction can be perfect for you. If, however you're not, then waiting for the home to enter into the general housing market may be a better choice for you to consider.

Next week, in part two of this two part series, I will write about what typically happens to a property when it fails to sell at auction, returns to the lender and then becomes available on the open market. Until then, happy home searching.

Scott M. Williams is a licensed Realtor® at Butler Mohr GMAC Real Estate in Defiance, Ohio. He can be contacted at:

Scott@butlermohr.com or 419-438-1165

www.DefianceAreaHomes.com

Have you ever put on a pair of jeans after washing them and found a dollar or two crumpled up in the pocket? Everybody loves to find money. Now, think what it would be like to find $5,000 in your pocket. That's exactly what is happening right now in the Defiance area, as several of our local banks have received grant funds called Welcome Home funds, to disperse locally in order to assist people in buying homes. That's right, right now homebuyers can get up to $5000 free to help in the purchase of their home.

According to the information given to me by Ryan Frederick at Sherwood State Bank, there are a few eligibility requirements that one must meet in order to receive the funds. First of all, the homebuyer is limited in how much income that he or she makes which is adjusted for family size. Second, the homebuyer must contribute at least $500 of their own funds towards down payment and closing costs, but allows $300 of that amount to be a gift from other sources. Third, the buyer must have reasonable credit to obtain a home mortgage. There is a fourth requirement but, that affects first-time time homebuyers only, as they must complete a homebuyer-counseling program.

Not only does the homebuyer have eligibility requirements, but also the property. There are two main requirements for the property. First, the property being purchased must be used as the buyer's primary residence and second, it must be subject to a legally enforceable restriction in the warranty deed. This second requirement means that if the property is sold or refinanced within 5 years of purchase, then a prorated amount of the grant must be returned to the fund. However, if the buyers do not sell it or refinance it within the 5-year period, they don't ever have to pay it back.

There are a few little nuances that I did not discuss here, but as you can see by the brief description of this program this is truly a great opportunity for homebuyers to take advantage of right now. Don't put the money back in your pocket and hope to find it again someday as one of the most important things to remember about these funds is that they are on a first come first serve basis and once they are gone, they're gone! Contact me if you'd like to take advantage of this great program.

Scott M. Williams is a licensed Realtor® at Butler Mohr GMAC Real Estate in Defiance, Ohio. He can be contacted at: Scott@butlermohr.com or 419-438-1165

www.DefianceAreaHomes.com

If you haven't been downtown lately, you are in for some challenges as each week they continue to work on the sewer project. Today they had Second Street shut down right in front of the court house.

If you haven't been to Defiance before you'll know that Second Street is a major road in town as it's the main passage to the east side of town. When I happened to be there, I saw a semi trying to navigate down there and I have to say that I'm glad I wasn't driving it.

We'll make the best of it as it's going to make Defiance even better than it is.

Until next time.

Scott

It has been exciting as of late as I've started seeing a lot more activity in the Defiance Area market. I attribute the activity mostly to the good weather we've had lately and the inventory of homes that are available in this market.

I wrote a post a few posts back that tell of how the market is doing here and am encouraged by where the market is heading.

Foreclosures are still an issue here in Defiance, but they are creating some great buying opportunities for those who are prepared to buy.

If you've been considering selling your home, then this is really the time to get it on the market as people are looking and making offers. An agent in my office just sold the same house 3 times this week! The first two contracts fell apart, but the third one should get it done.

I guess that's it for now. Catch up with ya again soon.

Scott

Scott Williams
www.DefianceAreaHomes.com

Scott@butlermohr.com

March Housing Statistics

If you've thought of buying or selling a home in the Defiance area, you have probably wondered what the housing market was doing here in comparison to the national market statistics. So, each month I will be bringing you the Defiance area's housing statistics to keep you abreast of what is going on, where the market has been and where it's heading. Hopefully, by doing so, you will be better informed when you step into the home buying or selling process and have a better idea of what to expect.

As for March, it was a steady month for the Defiance housing market as its residents were starting to stretch their legs out a little. Warmer weather, promise of summer coming and steady house prices are beginning to attract buyers. With the snow finally gone, buyers are now able to get a better view of what each property has to offer without having to guess what was under the it. This is good news for seller's as it means showings should increase on their properties and hopefully, so will the offers.

As of March 31^st, there were 210 single-family properties for sale in Defiance of which 39 of those were new listings. There were 11 properties that were contingent upon some factor such as inspections, financing or sale of their home. 8 homes were pending and heading toward closing while 17 properties sold at an average sales price of $106,533 and were on the market an average of 101 days. The average days on the market showed the greatest improvement as it dropped from February's average of 117 days on the market. This average should continue to decrease as we go through April and head into the summer months.

We are starting to get a little better picture of what the year holds for the Defiance area market as this first quarter has come to an end. The year-to-date statistics show that there have been 53 sales so far this year at an average sale price of $103,568 while being on the market for an average of 114 days. Compared to the first quarter last year, it's a mixed message. There were 66 sales in the first quarter last year, 13 more than this year's, however, the average days on the market was higher at 131 while the average sale price was virtually unchanged at $103,878. What this information points to is the current inventory of houses should start moving a little quicker. This, together with the consistently low mortgage rates, should begin to thin the current inventory levels while pressuring the prices of home to rise. This is particularly good for home sellers as it has the potential to produce better prices for their homes. As for buyers, this means that if you have been considering a home, now might be the best time to find one.

The Defiance area real estate market continues to hold lots of promise as it shows strength and resilience while other national area markets are not. If you are considering buying or selling a home in the Defiance market continue to do your homework, watch for next week's article, ask lots of questions and your potential for success will be great.

Scott M. Williams is a licensed Realtor® at Butler Mohr GMAC Real Estate in Defiance, Ohio. He can be contacted at: Scott@butlermohr.com or 419-438-1165

http://www.defianceareahomes.com/

(Statistics derived from MLS areas Defiance, Defiance Township, Ayersville Area and NE Defiance County)