The message is made clear in "Agent Only" Remarks in the listings. No disclosure is the most common thread.
"Caveat Emptor! We aren't going to tell you much, if anything about the property, but here it is if you want it."
It is NOT my intent to say that ethics are violated here by foreclosure Sellers or Listing Agents. I really only want to hammer home a point to Buyers who put their credit and finances on the line chasing profits that can be quite elusive. The risk in buying these homes is great, and risk-adverse Buyers, or folks with fragile financial standing don't belong in this market. Can one make profit/equity in foreclosures? Yes. But it isn't a lock, isn't guaranteed, and isn't easy.
I pulled up some "Agent Only" Remarks for Buyers to consider, with my commentary in bold font:
"No property disclosure. Property is a foreclosure. No knowledge of the systems." "Am I safe to assume there will be no Seller repairs?" I think so.
"*Sold 'AS-IS'*. Seller to make no repairs. Propety exempt from Residential Property Disclosure. Seller to send addendum for completion after negotiations finalized. REO Department hours are Mon - Fri 9am to 5pm est. *NO UTILITIES CAN BE CONNECTED FOR INSPECTIONS ON THIS PROPERTY.* CASH OFFERS REQUIRE A 10% EARNEST MONEY DEPOSIT IN CERTIFIED FUNDS TO CLOSING ATTORNEY." 10% Earnest Money on a cash offer? The banks are tired of people waking away from their $500.00 deposits, and want Buyers to have a little skin in the game. With no disclosure.
"Bank owned property, being sold as is.Special addendum required once terms have been negotiated. Exempt from NC Property disclosure due to foreclosure. No survey available. Cash buyers need proof of funds." Please, let's cut to the chase. Just give us the addendum and let's get the party rolling. Better yet, post the addendum in the MLS docs so we can show it to our Buyers before seeing the home. They need to see that there is paperwork that will override most of the buyer protections built into the standard NC Offer to Purchase and Contract.
"Available for ********** Financing. Call Agent Help Desk for more information *******. No appraisal required. Home has been repaired but is being sold as is. Exempt from NC Property Disclosure due to foreclosure. Seller is ********. No survey or history of property available. Special Addendum required once terms have been negotiated." And again: Please, let's cut to the chase. Just give us the addendum and let's get this party rolling. Another note: Watch out for the Seller who will finance without appraisal. That is a common hook in Lease/Option scams. What is the place really worth?
"Bank owned property, sold AS-IS, no property disclosure.See attached ADDENDUMS in MLS docs.******** PREQUAL or proof of funds required..." Whooooo, Doggie! "Attached addendums in MLS docs..." Good job!
"...Plumbing leak in crawl space will not be fixed by Seller..." Sniff test?
"Subject property is being sold in 'AS-IS' condition seller will not provide transfer disclosure or survey, call listing agent for information on seller deed restrictions" You aren't getting a General Warranty Deed, for sure. But that is typical of foreclosures. Hire a sober closing attorney who will sweat bullets over the title search.
"The property is being sold 'as is'. The property is exempt from the residential property disclosure statement.There is no history or survey on file. The property will convey via 'special' warranty deed. Call for addendums prior to writing an offer." "Special Warranty Deed spelled out. Now if we just had the addenda posted on the MLS docs.
Most foreclosure homes are listed at 75% to 90% of ARV, After Repaired Value. Some are actually listed at the retail value, despite needing thousands of dollars in work to make them habitable. The one I was in last week with all the windows taken apart and laying on the floor comes to mind.
You'll need a sharp razor to slice a profit off many of them. To the retail Owner-Occupant Buyer, "profit" is the equity gained in the home after repairs and updates. It is your reward for taking the risk of purchasing a compromised property. You deserve some profit, but you'll bargain hard to find it.