If you are a buyer who is looking to buy a foreclosure (a bank-owned property-also called an REO) in Escondido, San Marcos, San Diego County and beyond, you may want to think again.
In many parts of the United States, particularly in San Diego County, buying a foreclosure is en vogue. Buyers flock to these properties because they are allegedly a "great deal." But, are they?
While each and every foreclosed property listing is different, the majority of foreclosure listings in San Diego County are listed below market value, and receive anywhere from 10-30 offers in the first 5 days!
Here are some things you may want to consider when purchasing an REO:
- Do you really want to compete against so many other people to buy the foreclosed property? (Competition drives up the purchase price.)
- Will your offer be strong enough? (If you are obtaining an FHA or VA loan and putting little to no money down, your offer may not--unfortunately-be competitive.)
- Are you qualified to go high enough in your offer to compete with the others or is your first offer your highest and best? (Again, competition drives up the purchase price.)
- Once your offer is accepted, will the property actually appraise for the purchase price? What will happen if it does not? (If the competing offers drive the price very high, the new purchase price may be actually higher than an appraised value. If you are getting a loan for the purchase, this factor may impact your ability to obtain financing.)
There are many other factors to consider including contracts and communication with REO listings agents. I will address those factors in a future post . . . so, stay tuned or-better yet-subscribe to my blog!
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