Are bank owned homes worth the savings?
I asked myself this question yesterday while i was showing bank owned homes with the realtor I work under to a couple clients. We chose three homes, and set out having no real idea of what kind of condition these homes would be in, etc. But we did have a client who insisted on buying bank owned.
We traveled to the first home which was in Murrieta CA 92562 . It was a wreck. From the moment we pulled into the driveway the overgrown lawn with weeds as high as a foot seemed to come at us from all over the lawn. We walked inside to find black carpet, (Yes from dirt) holes in the walls, the front door was broken off of the support, a half gutted kitchen with remenents of an old stove and filthy oven, and needless to say, we quickly left the home.
The second home was a 90 degree turnaround. It had ok curb appeal, but the lawn was still dead. It was located in East Murrieta , or 92563 . We walked in to neutral basic carpet (But new) light grey paint, and a decent floor plan. But you could tell someone was still pissed off about losing their home. Holes dotted the walls, the upstairs master bedroom closet had the built in shelving removed forcefully. But overall, the home was in decent condition.
The Third home was amazing, but left us with a sad feeling. It was located in West Murrieta Ca 92562 .As we were walking up the neighboor told us the story. The guy who owned it was a carpenter, had a heart attack, and couldnt work in essence losing the home due to health reasons. But what can you do? Foreclosure is a tough process for everyone! Anyways, back to the home. 20 inch tile, upgraded carpet, crown molding in every sq ft (2800) of the home, custom built in bar, granite in the kitchen with full backsplash, mocha cabinetry, built in entertainment center, dual air, no homes behind, and all for the amazing price of under $400,000! We couldnt believe it and left knowing this was the one!
So heres what I dont understand.. Why do realtors say all bank owned homes are bad buys? Is it because the commission is often half that of a regular sale? Is it because there is a lot more legwork and paperwork? I can't grasp the sense as I often see postings on here about how bad of a buy bank owned homes are. I think exactly the opposite. You're getting the client a home for $100,000+ below its last market sale, and youre helping them build equity in this steady declining market!
We ended up offering on the third home, and it looks good! The client is thrilled, and it gives me a sense of completion knowing I am helping someone live their dream. So to the realtors who say buying bank owned isn't the way, I think its all in how much work you're willing to do for the client. We showed this particular client 12 homes, and it just so happened the 12th home was the right one for him.
So to sum it up, bank owned homes can be a superb buy if the realtor is willing to go the extra mile and seek them out!