In an underwhelming report issued this week by Field Asset Services, the company revealed that people would rather buy a foreclosure that has new paint, carpet and appliances than a foreclosed home that has not been spruced-up.  Really?

Field Asset Services is a Texas based company that provides cleaning and rehab services to banks and companies holding REO properties.  In an independent study during the first half of 2010, 17,252 properties were tracked across 13 states.  The homes that were not rehabilitated were on the market for an average of 222 days while those that were rehabbed sold in 69 days.

The benefits are obvious.  Not only do banks cut their expenses associated with holding a property but neighborhood values are also improved by reducing the number of vacant homes.  It is also more likely that the home will be sold for more and bought by someone who is going to live in it versus an investor looking for a flip.  Everyone wins.

So at a cost of only $4000 – $8000 for the average rehab, why aren’t more banks willing to put some lipstick on the pig?  I wish I knew the answer to that one!  I was assigned a foreclosure listing back in September.  In early December, the bank finally got around to asking me for quotes to rehab the place.  I supplied 2 quotes at roughly $4200 each…..and I’m still waiting.   They won’t let me list the condo in the MLS, and won’t let me sell it to an investor…..because they’re still trying to decide if fixing the place is worth it!  Crazy!  And people wonder why there is a glut of REOs on the market?  I say slap on the make-up and get ‘em movin’!

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