Everyone loves to get a bargain. And with a good supply of bank-owned properties available for sale, it seems like there are great deals ripe for the picking! And buyers are coming out in droves!
But the fact of the matter is, not all foreclosed properties offer distinct advantages over conventional, appropriately priced property. In many cases, you are purchasing a property with all of its faults and defects.
In most cases, banks and lenders do not offer any kind of disclosures or termite clearance letters or warranties of any kind. The buyer is responsible for determining the suitability of the property for purchase.
Many are also in need of a significant number of repairs, making it necessary to get specific kinds of loans to cover repairs but that also increase the monthly mortgage payment! Some of the properties also suffer from incurable obsolescence, meaning that repairs may be more costly than the expected increase in value.
There are also some excellent and desirable properties that are bank owned for sale. But competition from other buyers could lead to escalated sale prices very close to the free market price for a normal listing.
Sometimes, you best overall deal can be negotiated with realistic conventional sellers who understand the market and are willing to price their real estate at true market prices. You can still get a great value and you can mitigate the risks that might be associated with purchasing an REO property with unknown defects.
So don't limit property searches to foreclosures only. You might be missing out on a great deal!
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All content, including text, original art, photographs and images, is the exclusive property of Coweta Fayette Real Estate, Inc., and may not be used without the expressed written permission of Coweta Fayette Real Estate Better Homes and Gardens Metro Brokers, Newnan Georgia. All information is believed to be accurate but is not warranted, Copyright 2003-2009. Richard Weisser REOS, E-Pro. licensed Auctioneer. 770-827-6225.
Learn more about Coweta County and Fayette County Georgia Real Estate, and to search the entire Georgia MLS for free with no registration required. Visit CowetaFayetteRealEstate.com! Photos of the Great Smoky Mountains National Park. North Georgia Photos.
The best deal, for me, is if I really love it---or can love it & make it feel good to be called HOME...otherwise, it's just another place to work and spend your money...and that's just Project House and not a HOME...no more fixer-uppers for me! Nice post, Richard/
Richard, you're right, there is an increased risk with foreclosures, and many times you won't know the extent of the problems until after closing. I've had experience with them in the past--and currently live in one--but many of them are not for the inexperienced buyer. BTW, what's the price of the one in your photo? It looks like a good fixer-upper to me : )
Mara...
One of the requirements for the last house I purchased was ""no repairs." I want to be able to enjoy my home instead of having to work on it all of the time! THX
John...
Why all it needs is paint and carpet! lol and thanks for the comment.
Most of these types of homes also state that the township use and occupancy permits & the repairs necessary are the responsibility and cost of the buyer! You could spend that money up front and possibly not make it to settlement for some reason. I like to ask this question: Do you want a good house or a good deal? I can find you a good house at a good price. If it's just a good deal, there a reason for it. And it will also probably lead the home to be a good deal for the buyer that buys it off of you later!
I think there is so much misinformation regarding the so-called advantages of buying foreclosed properties. My experience is similar to what you ahve described. I caution people about the risks... some just don't want to listen.
No! They're absolutely NOT always the best deal. And you have to deal with the banks and the extra fees. But that photo looks like a real winner!
Richard...the risks on a foreclosed home are very real. Anything over 20 years can have dramatice problems. Even newer homes can also, but, A good home inspection is a must on this type of purchase.
I do not believe that they are ALWAYS the best deal! Condition- etc. Often a seller who has lived in a home and taken good care of it BUT needs to sell will price it right and it is THE BEST DEAL!
Richard, foreclosures can be a good deal OR NOT...
Here REO's are often in such a state of disrepair that they require a mini-construction loan to make them habitable again. They are certainly no always the best deal around.
There can be some bargains-- but some need a lot of work.
"So don't limit property searches to foreclosures only. You might be missing out on a great deal!"
Hi Richard... this is outstanding advice! As a Short Sale Specialist, I tell buyers who approach me this very same thing! There are many great opportunities and deals out there... and not all of them are foreclosures or short sales.
Richard, very wise advice. Certainly for the first time home buyer, unless they have cash in reserve, I actually sit and explain this to them, then SHOW them.
Richard, what you wrote makes a lot of sense. All available properties should get a fair shake!
Hey Richard: In our market, foreclosures are USUALLY full of serious condition issues. I try to tell my clients that it is often more logical to purchase a home that is priced 30--40% higher which has been loved and cared-for by it's owner then a low-priced, forlorn foreclosure harboring unknown problems and costly repairs.
Richard....you are so right! And true, there are deals to be had if the agent does their homework. I just sold a new construction bank owned property. But it was a local bank, and they repaired EVERYTHING we put on the Amendment! I could not believe it!
Now I have some buyers that came to me with a list of foreclosures they want to look at. Some are in parts of town/buildings they would just be making a BAD buying decision. When I tried to tell them that (with in reason and no Brokerage Agreement) they looked at me like I was trying to sell them something for more money!
Never a dull moment!
It's hard to convince the people out there who just "want a foreclosure". Someone has told them that is what they should putchase.