This blog was inspired by Charles Buell's The Perfect Storm
I started thinking about this, and realized how amazed I am that some short sales, but mainly foreclosures are coveted by Buyers.
Because Buyers think that a Foreclosure, mainly, is a great bargain. The lure of getting something for nothing, or a lot of house for a little buck.
Sometimes that's the case. Most times, it's not.
The main thing to consider when you are representing a Buyer, or are a Buyer, is condition. The condition of foreclosure property might be in dire straights -- a tear down -- or, it might need some sweat equity.
Rarely, and I mean rarely have the foreclosed homes I've toured been move-in ready.
If you're a Buyer, or representing a Buyer who is interested in Foreclosures, try to be realistic.
- Do you have the funds to fix the place up?
- Is the property going to fund?
- Is the property going to be a money pit with unforeseen headaches (Netflix "The Money Pit")
- Will the money you put in to it pencil out in the long-run?
- Do you have the time and INCLINATION to make updates?
- REPEAT: Do you have the FUNDS to fix the place up?
I toured a Foreclosure on Sunday. It had gone PENDING, but was back on the market. I took my clients out to see it. From the photos it looked fine. Upon closer inspection: the roof needed replacing, the garage door was dry rotted, the rain gutters were rusted (leaked), the flooring needed to be replaced, there were no appliances, and the siding (which the listing agent noted as "OTHER") might have been LP . . . the kiss of death in our local area.
This might have seemed like SUCH a DEAL on paper. It required a lot to make it move-in ready and that = MONEY!!
Looked GREAT in the photos! A lot do.
I hope the Buyers didn't waste spend money on a home inspection. Maybe what Charles is blogging about happened? And that would have been a shame! A good, experienced agent -- such as YOURS TRULY -- would have pointed out the issues, prior to writing an offer. Perhaps, saving the Buyers $300 to find out the OBVIOUS!!
Keep in mind, Foreclosures are sold "AS IS" in most cases. And "AS IS / WHERE IS" aka: What you SEE . . . IS what you get!"
And most Foreclosures are: YOYO (You're On Your Own!)