Study the following text, and annotate.

Foreclosed Homes

On August 1, 1989, the National Association of Realtors stated that “an index measuring the
ability of the typical American family to buy a home fell in June to its lowest level in three years.” They
went on to point out that an average family cannot afford to buy a moderately priced home. This is
because many people feel the only way to own a home is to buy it new. But in reality, this is not true if
people are willing to take advantage of the resources within the community. One of these often
unrecognized resources is a foreclosure home. Many foreclosure homes, even if “neglected” or “run-
down,” can be transformed into attractive, comfortable homes if someone is willing to take the time to
find one available and is willing to fix it up. These foreclosure homes that often need a little fixing up are
advantageous to in dividuals because they allow them to afford a home, to buy a home that often
appreciates rapidly, and to experience independence in ownership and in their creative abilities.
Many American families who find it almost impossible to buy a new home can often afford a
foreclosure home. Individuals who are looking for a home can prequalify for a loan and, in this way,
know what their price boundaries are. Individuals who prequalify for a $39,000 mortgage would have a
hard time finding a new home in this price range. Phylis Booker, a real-estate specialist who has dealt
with foreclosure homes for many years, believes that “FVA, VA and banks who find themselves holding
foreclosure home are not interested in making a profit. They simply want to get the money that is owed
to them and then get out. ”One of Booker’s clients was a young man who prequalified for a $42,000
home, he bid on four closure homes before he was the top bidder on a home and was able to move into
one.
Another way to purchase a foreclosure home is to catch it before the foreclosure papers have
gone through. In this way, the prospective buyers can put in a bid and many times can bargain with the
owners. Both buyer and owner stand to gain. An article in the June 1989 issue of the Reader’s Digest by
Sonny Blochand Grace Lichrenstein gave an example of just such a case. The couple noticed that a home
in a nice neighborhood “appeared to be abandoned.” After locating the owner and finding that the
home was in preforeclosure, they found that the owner still owed only $17,000 unpaid balance. The
home was later appraised at $67,000. The house continued to increase in value following repairs. But
initially, the buyers were able to purchase the home at 60 percent below its value.
Once a foreclosure home that is in need of repair is purchased, the appreciation rate can
increase rapidly. A home is assessed in line with the other homes in a neighborhood. Therefore; a home
that is run-down and in need of repair can often be purchased at a bargain price. According to Susan
Givens in an article in Money, “You may be able to purchase a dilapidated house for 20 percent to 50
percent below the value it will be after you’ve put work intoit.” According to Booker, one of her clients,
a single parent, “bought a three-bedroom foreclosed home for $63,000 in a neighborhood where the
median home was $85,000.” The parent fixed up the house that did not need any major repairs and
almost four years later sold the home for $86,000. The appreciation was much greater than it would
have been had the woman bought a new home. The bottom line, though, is that she would never have
been able to afford an $85,000 home at the time.
Buying a foreclosure home gives the owner a chance to experience independence through
applying creative abilities. In the article “Buying a House That Needs Paint,” published in April 1986 by
Money, WilliamBanks relates the experience of a divorced mother of three who bought a home that
needed fixing up. Though the house “lacked space to handle her six-foot wide grand piano,” she
purchased it because “she figured that she could enlarge and remodel the house to suit her
requirements.” He went on to say that she appeared in the August 3, 1987, issue of U .S. News and
World Report, a Rockford, III., interior designer was quoted as saying that “fixing leaky faucets gives me
a sense of real independence.” Turning something mediocre into something beautiful can build pride
not only in owning a home but in a person’s ability to accomplish this feat.
Homes are not out of reach for individuals within our society. With planning and hard work,
individuals can own their own homes and turn them into whatever they wish. If people have the
discipline to proceed slowly and methodically, they can afford a home today – maybe not a brand new
home but one that can be turned into a beautiful dwelling place that reflects the personality of the
owners.