Buying a Knoxville Foreclosure - What You Need to Know

Unless you've been living under a rock for the last year then you know that "Foreclosures" are all the rage!  The news is talking about them daily; people are searching for them online by the minute; and many savvy buyers are taking advantage of the buying opportunities that all these foreclosures are bringing. 

The Knoxville area hasn't been hit nearly as hard as some of the larger markets, but of course, we didn't have the huge value increases that those markets had either.  However, we do have our share of foreclosed homes. (As of this writing there are 306 in Knox, Loudon and Blount County alone). 

I've been buying and holding investment real estate for 16 years now.  This is the 2nd time I've seen a market like this one.  Forget all the doom and gloom - this is absolutely THE BEST time to buy a home.  Whether you're an investor or an owner occupant.  We're experiencing the perfect storm - high inventory, low prices, motivated sellers and low interest rates. So, if you're interested in taking advantage of this market and buying while prices are at the bottom, and especially if you're interested in buying a Foreclosure, here are some things you must know.

1. Be Realistic - this goes for prices and condition.  Banks typically get several opinions from qualifed professionals on the "AS IS" value of a home before they have a Realtor put it on the market. The condition of the property is taken into consideration when listing it and typically a realistic price for a sale within 30-60 days is set on the house.  In other words, don't think you're going to pick up a house listed for $100,000 at $ 50,000 just because it's a foreclosure. 
2. Bring Hammer and Paint - Will travel.  Most foreclosed homes need some work.  You can't compare these homes to the ones you look at in new construction neighborhoods, at Sunday Open Houses. And, as mentioned above, the should be priced accordingly.  Have your Buyer's Agent run the comps and confirm proper pricing.
3. Deferred Maintenance - Get an Inspection.  People who have lost their home to foreclosure have often had financial issues for some time which often times leads to deferred maintenance. It's not uncommon to look at a home that has no kitchen cabinets, large holes in walls, and leaky roofs. Be sure to get a home inspection so you understand what work is involved in getting the home up to shape, and make sure that your Buyer's Agent runs the comps and helps you determine fair market value.
4. Foreclosure Competition.  That's right - it's the hottest segment of the market place right now.  EVERYONE wants a deal and everyone thinks they are going to get one in a foreclosure.  Buyer Beware:  Just because it's a foreclosure doesn't mean it's a good deal.  I've seen at least 30 houses in the last couple of months that people overpaid for because they got caught up in the hoopla of buying a foreclosure.  There are a lot of good deals out there right now, but just because it's a foreclosure doesn't make it a good deal.  Some banks are more reasonable than others.  Some more savvy than others. 
5. Work with a Qualified Buyer's Agent.  When dealing with a lot of unknowns, like in the foreclosure world, you really MUST have someone working on your behalf.  Work with an Accredited Buyer's Representative and make sure they are representing you and your best interests by signing a Buyer's Agent Agreement.  This person should be experienced in estimating repairs as well as in determining market value.

For a complete list of Foreclosure Properties available in the Knoxville market, please give us a call at (865) 694-5999 or email: cortjones@comast.net.  Visit our website at www.ETNHomeSolutions.com for all your real estate needs.