The foreclosure market is certainly a hot place to look for unbelievable deals on property ... but not everyone is prepared for the realities of buying one of these
homes. It is important to have your facts straight and your expectations in check when looking at foreclosures. There are plenty of people hoping to take advantage of
these rare market conditions, and the more informed you are as a buyer the more likely you are to become a happy owner of one such property!
Below is some information I like to review with my clients before embarking on this rewarding adventure.
"As is" Property
Most foreclosure properties require some work prior to moving in. Generally speaking, you should expect to replace any carpet and re-paint the interior. A full
inspection prior to purchase is essential to forecasting any additional expenses the property may require. We work with an excellent inspection company that will help
guide you through this important step.
The Offer Process
It is best to pick a top 3-5 properties that meet your needs when looking at foreclosure or bank owned properties. Recent market trends indicate banks are listing
properties 10-20% under the market value with the intentions of attracting many offers and creating a bidding war. Competing offers may cause you to bid the home above
list price, but keep in mind this will still be an excellent value! Our expertise will assure your best interests are represented during this process.
Once the paperwork for the purchase offer has been completed, we wait for a response from the bank. This normally takes 3-4 business days.
If the bank accepts the offer, they will send out their addenda to be signed by the buyer. This addenda dictates the conditions and terms of the transaction. Once this
is signed by the buyer, it goes back to the seller for signatures. A purchase offer and the bank addenda signed by both buyer and seller, allows us to open
At this point, we have an executed contract and the transaction proceeds like a regular purchase, with the exceptions listed below.
Foreclosures vs. Regular Sale
- Property is purchased in "As Is" Condition
- No property history report
- No Insurance claims history
- Can have missing appliances, fixtures, and fix ups needed prior to move in
- Likely to get into a multiple offer situation due to low asking price