As more and more foreclosed properties are being inherited by banks, they are now making huge investments to transform these properties into more appealing and sellable products.  These foreclosed properties usually have problems ranging from molds, water damage to broken windows and lost plumbing fittings.

Before, banks tend to be more cautious in shelling out money for repairs needed by foreclosed properties.  Real estate professionals, however, made propositions for repair that the banks eventually paid attention to; which is a good thing as these repairs made the properties more attractive to a wider market.  Small investments needed for repainting, new carpet, repairing holes or leaks in roofs, fixing damaged floors or replacing missing plumbing fixtures are now handled by banks.

By making the home more habitable and attractive, the banks are no longer limiting their buyers to professional home restorers and investors.  They can now interest even the regular home buyer or owner-occupant.  Generally, ordinary home buyers will not likely get a property if it is unlivable as it seems next to impossible to get a mortgage for such property. 

The whole real estate market, in general, will benefit from what the banks are doing, since these transformed, foreclosed properties can now be sold at higher prices.

Real estate firms and agents are offering banks more ideas on how to improve and make the properties more attractive to command higher prices.  Foremost, is knowing the target buyer for a foreclosed home.  For instance, if the home has potential appeal to owner-occupants, the agent will suggest fixes ranging from repainting to major renovations that could worth thousands of dollars.

Source: “Banks Fixing Up Foreclosures to Spur Sales; Strategy Aims to Give Them Broader Appeal, Reduce Big Inventory,” The Chicago Tribune (March 13, 2011)