Foreclosures.. worth the headache!??

With the economy not being the strongest over the last few years, it only makes sense everyone is out to save when and where they can.  We've all made adjustments here and there to truly save every penny possible.  So when it comes to purchasing a house, it's completely understandable to initially think of foreclosures.  Why not, right!?  You can get more house for the money and, speaking of sales price, you can typically negotiate a much lower price than when dealing with a homeowner as the seller.  Although it seems like a great idea or plan, there are a lot of things that go along with purchasing a foreclosure that may out weigh the thrill of purchasing a new home at a discount rate.  I'm not saying you should or shouldn't purchase a foreclosure, I just want you to be fully educated on what you're getting yourself into before proceeding. 

 

Here are a few things to consider prior to putting an offer in on a foreclosed home (not to include small, local, and locally-owned banks):  

 

1. The Seller is the Bank -- this means that they will play by their own rules and will, more than likely, not adhere to any deadlines.  Your offer will be sent to the foreclosure department (more than likely in another state) given a number and thrown in line with the hundreds of thousands of other offers on other bank-owned properties and they will get to it when they get to it.  If you are needing to move in 30 days, a foreclosure may not be the way you want to go.

2. You may be able to negotiate a better price but 9 out of 10 foreclosed properties are "AS IS WHERE IS" which means the bank is not willing to make any repairs.

3. There is not a seller's disclosure so you will not have any information on the history of the property.

4. The bank will create their own contract to 100% protect themselves with little-to-no protection for you. Before signing ANYTHING, I always recommend you have an attorney look over the contract to make sure you have some protection.

5. The bank will select their own Title Company.  This may not seem as big of an issue but trust me, my Title Company is FANTASTIC; they will bend over backwards for me and my team and have again and again (even when they don't have the transaction).  In dealing with other Title Companies, you learn really quickly what makeas a great Title Company and what makes a decent to horrible one.  I like to choose my team - Lender, Title Company, Inspector, etc. (and when I say "choose" I mean give 3-4 options of people i have worked with in the past who I KNOW are fantastic at what they do) because a great team can make the transaction smooth and pleasant, and a bad team can make the transaction painful for all parties involved.

 

These are just a few things you need to look forward to when dealing with a bank-owned property.  They are not impossible, just usually more difficult to get through.  Expect little-to-no communication from the other agent and/or bank, and expect bumps all along the way.  If you're laid back and can deal with these issues without getting overly stressed, then I say congratulations on a great home at a fantastic price!

Britney Elizondo

Buyer Specialist, REALTOR® | Vicki White Homes | a team within Keller Williams Dallas City Center | www.vickiwhitehomes.com