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What you don’t know about foreclosures (but should)

Posted on March 7, 2008 | Filed Under Foreclosed Homes for Sale, Real Estate Education

You see it on the news, cable television and infomercials-

Buy foreclosures at pennies on the dollar! Save big money in real estate investing with foreclosure short cuts!

I regularly sell and help people purchase foreclosures in the Roanoke Valley and surrounding counties. With all this experience I’ve learned a thing or two! Here’s the real skinny folks and a few things you need to know before thinking about buying a foreclosure-

Foreclosures are often a very good deal but not the kind of deals you see on TV.
As an agent who regularly markets, services and sells foreclosed homes in the Roanoke area, I understand the process and while it is a foreclosure, the bank who owns it is trying to keep from losing as much money as possible. They do not sell for pennies on the dollar.
Foreclosed homes generally are in fair to poor condition.
It’s unfortunate; the people who lose their homes to foreclosure do so because they can’t afford their payments and therefore also can not afford to upkeep the house. Foreclosed homes almost always have maintenance needs and sometimes major maintenance problems.
Foreclosed homes are sold “as-is”.
The financial institutions who own these homes know they have problems and they aren’t going to spend time negotiating over carpet stains or damaged tiles. Before a foreclosed home is ever advertised for sale, it has gone through a rigorous valuation market analysis with the listing agent and other real estate agents who take these problems into account when suggesting a fair list price on the home. Hire a home inspector so you are less likely to be surprised with a problem after closing. Caveat Emptor!
Negotiating with the bank on a foreclosed property is almost the same as a private seller.
Low ball offers and unreasonable expectations are likely to be quickly rejected by the selling bank the same as you would on your own home. They are reasonable negotiators but not desperate.

So there you have it. A few tips from an experienced foreclosure agent. With all of that said, foreclosed homes are still a good deal and typically priced below the actual market value, and, the longer it’s been on the market, in most instances, the better the deal for you. Be smart though and consult with an experienced agent before buying any home, foreclosure or not.

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What you don’t know about foreclosures (but should)

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