How foreclosures affect your neighborhood

I had a buyer ask me the other day about a problem in their current neighborhood. The house next door is going into foreclosure. Unfortunately, the husband and wife divorced, the wife got the house, and she could not keep up the payments.

Foreclosures are more of a concern in these recent months, due to sub prime loans. My mother said that in our hometown paper in Georgia there are pages of foreclosure notices. The big question: how does it affect your home's value?

I did some research to see what the experts say. The response: the price of your home may decrease by 1.5% if there is a foreclosure in your neighborhood.

How do you decrease the risk? If you are friends with your neighbor, and they express concern about making their house payment, encourage them to seek out a Realtor. Make sure they are trained on how to handle families in this crisis. Ask them if they are familiar with "short sales." If they are not familiar with the term, ask them to refer you to someone in their brokerage that is familiar with them. I can provide assistance in locating someone who can help them.

When this problem strikes, it is easy for someone to want to stick their head in the sand. This is not the time for that particular action. Quick action must be taken, to insure the homeowner, the bank, and the neighborhood is protected.