Do you want to find real estate bargains? 

If so, you are probably going to look at vacant properties that have gone through the foreclosure process.

There are a fair amount of homes in the Colorado Springs area that are now REO's, (bank-owned) and are vacant; they seem to be everywhere.   My experience with showing homes in the Colorado Springs area has been that at least 80% of these homes are NOT in good shape; but they are typically priced appropriately for their condition.  

Here are some pointers for Homes buyers in Colorado Springs considering buying a home that's bank-owned and vacant:

1. Have your Colorado Springs Realtor seek out information on a home's former owners.  The bank won't tell you anything about the condition of the property, as they probably don't know anything about it.   Your Colorado Springs Realtor can search public records and find out:
   1. Who the previous owners were
   2. How long they owned it
   3. When the property was foreclosed on
   4. Who currently owns it
   5. How much the bank bought it back for
   6. How much the owners originally paid for it
   7. Verification of the square footage according to the the assessor office records
   8. How many owners has the property had
   9. How much the current property taxes are
2. Sometimes the best source of information about a home is from the neighbors; they usually know more about the house and the previous occupants than anyone else does.   When I have a buyer who really likes a bank-owned house, I encourage them to talk to the neighbors; it's amazing the things they can find out.   I also encourage them to drive through the neighborhood during different times of the day; as a neighborhood can be much different during the day than at night time and on the weekends.
3. Most people who must leave their home in Colorado Springs due to foreclosure don't deliberately damage their home; although some do.     Many homeowners who are facing foreclosure; don't have the money to take care of the every day maintenance and repairs on the house.   The paint may dinged, the woodwork may be scratched, the carpet may be worn, the sidewalks may be cracked, the roof may be bad, the house may need to be updated.  
   • I've seen some houses that have been completely stripped of anything valuable; including all appliances, cabinets, light fixtures, copper pipes, light bulbs, bathroom fixtures, carpet, built-in appliances, garage door openers, etc.  But what I see most of the time when I'm looking at REO's (bank-owned properties) is deferred maintenance; there are typically a lot of little items that need repaired.
4. Buyers should strongly consider an inspection of a vacant home in Colorado Springs.   Most bank-owned properties are sold "as-is"; consequently a buyer may want to consider a pre-inspection before they put in an offer; and definitely should do an inspection before they purchase the property.   In Colorado, sellers typically provide a Seller's Disclosure form when they list their house for sale; and Seller's should disclose what they know about the condition of the property,   Bank-owned properties don't provide a Seller's Disclosure; as essentially the bank doesn't know anything about the home.   
   • Inspections on vacant homes can be complicated by the fact that these homes often don't have electric or water; as they were turned off for non-payment during the foreclosure process.  An inspection can't be done very effectively when you can't tell if the cooling, heating, and plumbing and functioning correctly.
5. Have your Colorado Springs Realtor do research on the pricing on homes in the area.   I recently researched a home for a client looking at buying a home in Peyton Colorado.   As part of my research I compiled research on the following information:
   • Pricing on comparable houses that have sold during the last 6 months
   • Pricing on comparable "actives" in the same neighborhood
   • Opinion on whether the house seems priced appropriately for any work that needs done on it  
   • What are the average days on market in the neighborhood for sold properties?
   • How long has the property been on the market?
6. It's important for you and your REALTOR to read over the bank addendum.   In almost all cases, the bank will have the buyer sign off on a bank-owned addendum; and these addendum's supersede anything written on the original offer.  This addendum can include a variety of things; including inspection dates and terms , appraisal dates; escrow procedures, etc.   The addendums are typically written very "pro-bank".   If you would like an additional opinion on the addendum, you can always hire a lawyer who specialises in real estate and have him/her read it over and give you an opinion on it.

In Colorado Springs, many bank-owned homes are being priced very attractively when they are listed on PPAR, the local MLS.  They are priced to sell quickly.    And contrarily to what you read in the newspapers and hear on the radio, some properties are receiving multiple offers on them; often times they go for more than they are listed.    It's important to use a professional Realtor who understands bank-owned properties and how the process varies.

The original article was posted at:  Homes in Colorado Springs, 5 things to know about buying foreclosures

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Posted by KAT