As a real estate agent in Bend Oregon, Bend Foreclosures are one of the few market segments that are generating a lot of buzz right now. This has held true in many real estate markets across the nation. It is not unusual to see multiple offers on these properties despite the sluggish sales in other sectors of the real estate market.
One recent offer I wrote on behalf of some first time home buyer clients had received a total of 15 offers on it. While that may be an extraordinary amount of offers on one home, it demonstrates that there are definitely active buyers in what might otherwise appear to be a slow real estate market.
THINGS TO CONSIDER WITH FORECLOSED PROPERTY
The great prices on many foreclosed properties had generated a lot of interest among prospective buyers. Naturally many buyers are concerned about what exactly you are purchasing with a Bank Owned home. Generally speaking, the banks take care of paying off any known outstanding liens on the property and also pay real estate and escrow costs associated with the sale. As a Buyer you will generally not have any additional expenses buying a Bank Foreclosure.
The main thing buyers need to keep in mind when purchasing an REO (Real Estate Owned) home is that in most cases, they are purchasing the foreclosure 'As Is' meaning that the bank makes no representations as to the physical condition of the property and will not warrant the home against any physical defects.
TIPS WHEN PURCHASING A FORECLOSURE
TIP 1: Don't buy a foreclosed property at an Auction. The reason is because you are not allowed to view the interior or inspect the property you are purchasing. There are no refunds and no entity that is held accountable for any hidden issues that are discovered after you purchase the property.
TIP 2: Get reliable data on comparable properties within the same and similar neighborhoods as the property you are interested in. You'll learn what other homes are selling for, which homes aren't selling and why, as well as the trends in pricing that are currently going on within that price range of home. These comparables are best found by utilizing the services of a reputable Realtor who can give you the latest statistics.
TIP 3: Get your financing in order. Foreclosed Homes that are owned by Banks will not even consider an offer from you if you have not been pre-approved for a loan by a Bank or Lending Institution. There is nothing worse than seeing the home of your dreams and then losing out on the home because you didn't have your financing approved and the other buyer did. One other tip to consider is that Cash is King in a banks eyes. Even if your offer is for a higher purchase amount than a fellow buyer who is paying all cash, chances are the bank will favor the all cash offer.
TIP 4: Once you've located a good candidate and to help insure that you are not buying a potential money pit, a Home Inspection performed by a reputable and licensed Home Inspector can alleviate any real worries or concerns you might have with a foreclosed home. If the home has some substantial problems, banks on occasion, are willing to repair or replace the item(s) in question.
As an example, one recent foreclosure I worked with clients on was found to have a leaking Hot Water Tank after the water was turned on for the home inspection. Even though the bank was selling the house 'As Is' I was able to negotiate the replacement of the tank which saved my clients around $600. While not every bank is willing to do this, the approach that is taken with them can sometimes make the difference between a Yes and a No.
TIP 5: If you want further protection against physical defects of the home, you may also wish to purchase a home warranty on the home at the time of sale which covers potential issues like a roof leak, appliance break down, electrical and plumbing issues. Depending on what you wish to include in your warranty, the cost is generally between $400 and $600. Be sure and thoroughly read through the items that are covered in your policy if you choose to buy a home warranty to insure you know what exactly is covered and what is not.
TIP 6: Once you are satisfied with the condition of the property and the transaction is completed, you own the home like any other homeowner does. As long as your purchase is closed through an Escrow company, make sure the property you've purchased is covered by Title Insurance which protects you against financial loss caused by any defects in the Title transfer provided to you on the property.
When it comes to purchasing a bank foreclosed property it might be wise to opt-in to an Extended Policy Coverage, which in many cases can potentially protect you against any unforeseen liens that might arise on the property caused by any former owner. The Banks from which you bought the home will not protect you against further liens that might be placed on the property from the actions of previous owners. While rare, it can happen and this is why Extended Policy Coverage on your Title Insurance might be a wise option. Be sure and discuss your options with your Title and Escrow Officer to understand what their policies cover and what they don't.
The biggest problem most buyers have at the moment with Foreclosures is learning about them quickly enough so as to be able to write an offer on a foreclosed home of interest. As mentioned, many of these properties are receiving offers on them within a couple of days or even hours of being listed.
Tip 7: To avoid being left behind in locating and obtaining a foreclosed property, securing the services of a reputable and trusted Real Estate Broker which can go a long way in keeping you ahead of the Foreclosure market and hearing about the very best deals.
These tips can go a long way in insuring that your purchase of a Bank Owned property is one that you will be happy with in the years to come.
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