In what must be considered a clever piece of marketing, Fulton Homes is taking on the bank owned homes in the Phoenix real estate market.
What Fulton has found is what many others have seen – buyers are eschewing move-in ready homes, even comparably priced move-in ready homes, in favor of bank owned properties because they’ve been inundated with the idea that they’re getting a deal. Sometimes that’s true, sometimes it’s not.
Unfortunately, in their effort to promote the advantages of purchasing a new home versus inhereting someone else’s problems in a bank owned, Fulton’s schtick goes a little too far.
Let’s go down the list …
Says Fulton of REOs, “Nobody stands behind the work. Not even the bank. Nothing is backed up. AS IS often means the home has been abused.”
Not exactly. One-year home warranties are almost always available through companies such as Service One and Old Republic, and some home warranties (but not all) also will cover pre-existing issues. So, something is backed up.
Also, “as is” means the bank will not be making repairs and applies to homes in all kinds of condition. While it’s true many bank owned homes are abused, that isn’t the reason these homes are being sold as is.
Says Fulton, “You may have to evict previous owners.”
Um, no. Not unless you purchase the home at the trustee’s sale, which precious few people actually do. If you’re purchasing a bank owned home listed in the Arizona Regional MLS, the previous owners have long since departed.
Says Fulton, “Damage to the home can be expensive and time-consuming to fix.”
Agreed. It just depends on the property. As I tell all buyers, bank owned homes range from “nearly move-in ready” to “get a tetanus shot.” The latter can be brutally expensive to repair when all is said and done.
Now let’s jump ahead to where things really get stretched …
With a bank owned home, Fulton says, “the bank is in control.” With a new build, though, “you are in control.”
No. The builder is in control. And if the buyer happened to walk into the sales office without an agent, without independent representation, the builder has been completely in control. The builder determines the close date, the inspection dates, the walkthrough dates. In many cases, the builder ties incentives to use of their preferred lender. You use the builder’s choice of title company, not yours.
Where’s the control?
Says Fulton, “the home comes as is. Used homes often have dated and inferior tastes and styles.”
The alternative provided is the Design Center, where you can spend a small fortune in upgrades and watch the price of your new home skyrocket. The above statement also seems to make the assumption that the used home is several years old … tastes haven’t changed much in the last two years.
Here’s the big one …
Fulton on bank owneds: “Declining neighborhoods typically have several foreclosures, which means your property value might continue to diminish.”
Fulton on Fulton: “Fulton Homes builds outstanding neighborhoods that include walking and jogging trails, parks, and lush landscaping that provide exceptional long term value.”
Which may be true, but ignores the fact that foreclosures aren’t a function of the builder but of the buyer and/or lender. Fulton built homes in Fletcher Heights in Peoria. Some have since been foreclosed upon. Fulton built homes in Bridlewood in Peoria. Some have since been foreclosed on.
Fulton also built extensively in Maricopa … I mean, seriously. Do you think one or two of those have since become foreclosures?
This isn’t to single out Fulton when it comes to foreclosures. My first house, in Fletcher Heights, was built by them. We had a fairly decent experience with them, which was good since we never saw or heard from our agent after she walked us through the first time.
Foreclosures come in all shapes and sizes and from all builders. To imply that buying in a Fulton Homes neighborhood will insulate you from what’s happening in the Phoenix real estate market in general … well, I’d be starting to wonder on which one of Santa’s lists my name would appear after making such a statement.
One last note … if you do go the new home route, make sure you bring an agent with you so you can be represented. Go back to the paragraph on “control.” Builders still have the majority of the leverage, but don’t throw away what leverage you easily can have by going in unrepresented.
[tags]Phoenix real estate, bank owned homes[/tags]