I am noticing more and more foreclosures that are in bad shape. With Metro Detroit banks getting tougher with the appraisals. Appraisers are noting all the damage whether it is:
- roof that needs to be repaired
- missing light fixtures,
- drywall damage
- peeling paint
That is putting more Metro Detroit foreclosure buyers in the position of fixing the home before they actually own it. They have to go and fix the roof, or put in the light fixtures before the deal has closed.
It is a catch 22. You don't own the property, but you have to put money into it. It is a dangerous situation for the buyer. But you have to do it. The appraiser has to come back and make sure it is fixed and the bank isn't going to do it. You either do it or walk away from the house.
Most Metro Detroit bank foreclosures are needing some work right now. So be prepared to do a few things if you want the mortgage to pass. Or better yet is to get a 203k loan on the house if possible.
Russ Ravary your Metro Detroit real estate specialist
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I know our markets are similar in that there is a glut of bank-owned homes for sale with exactly the problems you've outlined preventing a typical person from purchasing them. But, as you also stated--FHA 203K Rehab Loans are the way to go! Or, an escrow holdback. :) Happy Selling!