Over the last few weeks, I've gotten a number of questions about buying New Hampshire bank-owned real estate because they have such great prices on them. Potential buyers here in the Portsmouth area are drawn to the attractive prices of those properties, without realizing the probably issues with those types of properties.
Foreclosures, which are the same as bank-owned real estate, are also listed in the Multiple Listing Service (MLS) as well. Banks most often use agents to sell their properties, and those will also show up on the sites and the various MLS sites. Here in New Hampshire and Maine, all of the properties for sale around the state will be listed in that system for all of us to have access to.
There are usually inherent problems with bank-owned properties that many times potential buyers don't think about until they actually go view bank-owned real estate.
The people who had owned that now bank-owned house fell seriously behind in their mortgage payments because they didn't, for whatever reasons, have the money to make those payments. Typically that also means they didn't have the money to take care of the house either, which means that needed repairs and/or improvements were not done as well as no payments being made.
When a bank takes a house away from someone, they're taking that person's or that family's home, and emotions are running very high in those situations. Many times, we see that the homeowner, during the time they were being forced to move out, take their anger out on the house. We see holes that have been punched and/or kicked in the walls, doors ripped off their hinges, water heaters taken, sinks pulled off the walls in bathrooms, busted windows, etc. People are very angry when their lose their homes, and they oftentimes leave those kinds of messes behind, thinking the bank will have to deal with it.
The way the bank deals with it is to sell it in 'as is' condition, meaning the new buyer takes on all those problems. Some of those problems come in the way of plumbing issues because there's been no heat in the house, and the pipes leak and/or burst. That causes multiple problems when that happens, and those are problems the new buyer has to take on at their expense.
Most of these homes sit vacant for some time before they even come on the market, and because they're empty, typically there's no heat or electricity on in them. And because of that, many times a property ends up with additional damage, and just plain deterioration. Vacant homes deteriorate faster than a home that people are living in - there's no one there to live in it and love it.
Having written all this, that's not to say that all bank-owned properties are like that, but the vast majority of them do come with their own sets of problems that potential buyers have to know may exist before they even go look at these types of properties. And if you do come upon any in the price range you're looking in, I'd certainly say they're worth looking at, as long as you know in advance what you may be in store for.
Banks are not usually aware of all the problems with a property they've got for sale, and the listing agents are not usually aware of all of them either. You do have the right to have any kind of inspections done that you choose, but the property is being sold in 'as is' condition, regardless of what comes out of the inspection. They may negotiate further on the price after the inspection, but they won't do any work needed to correct any deficiencies uncovered in the inspections.
So, while at face value bank-owned properties can certainly seem like a good deal, there's usually far more there than meets the eye. And yes, typically speaking, bank-owned properties are generally priced below the market, but now you know that there's good reason for that to be the case.
If you have the wherewithal to take on these types of projects, either because you have the skills to do the work that will likey be needed, or you have the finances to pay someone else to do that work, there may be some great opportunities in bank-owned properties for you.
If you're interested in pursuing homes, condos, real estate in Portsmouth NH and/or the surrounding areas, make sure you speak to an experienced professional REALTOR who'll work hard to help you achieve your real estate goals. Give me a call or send me an email - I'd love to talk with you!
Ann Cummings, New Hampshire - Maine REALTOR
Broker - NH and Maine
RE/MAX Coast to Coast
888-349-5678 x 3839
Servicing the Coastal Areas of NH & Southern Maine