Since distressed properties have taken over the market and may seem like the best deal in town, there are many things to consider before purchasing. one.
First of all, Foreclosed properties are much easier to purchase than properties that are pre-foreclosures/short sales. That's because the banks have already taken possession of the property and are now the current owners. They've have appraisals done and several broker price opinions done in order to help them determine the price that they should list the property for. These prices are generally prices that should get the foreclosed property sold within 30 days. That's the bank's motivation, to hurry and get these properties off of their books, so that they can continue lending.
Secondly, foreclosed properties are usually being sold AS-IS, with no Warranties, no Repairs, no Seller's Disclosures and is basically "what you see is what you get." Now grant it, each bank is different in what they will do in order to get a foreclosed property sold. For example, I had a foreclosed listing that needed extensive foundation work, to my surprise, the bank paid for that and the transaction closed smoothly. Also, on another transaction, I had a foreclosed listing that needed two HVAC units and the bank paid for those as well. So have your agent contact the listing agent to see exactly how motivated the bank is in moving a particular foreclosed property.
Thirdly, foreclosed properties can Close quickly, so be sure that you are pre-approved and have any other financial requirements in order. Generally, when the bank says "When," you should be ready to tell them, or they will move on to the next interested party.
Finally, you're not the only one interested in purchasing foreclosed properties. The competition is very stiff and if you are not ready to purchase then get out of the way, because you will only end up disappointed. Investors are out looking at the same foreclosed properties as you, and they can generally buy in bulk and pay cash. For example, I just listed two foreclosed properties last Thursday night and had three offers on one of them by Friday afternoon, and they were all from investors.
So yes, foreclosed properties are a great deals, but it is up to you to be ready and prepared to take advantage of those deals. Let me help get you ready you don't miss out on the opportunity of a life-time.
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MeLisa Minter, MBA, Realtor
469-766-7379
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