Foreclosed and distressed properties still make up a significant portion of our real estate market he
re in Richmond, Virginia and across the country. The mortgage meltdown created a portfolio of bad loans and the home owners found themselves forced to choose between trying to manage these under-water properties or walk away and start over. As a result, home buyers see foreclosed homes as part of the listings they review.
Often buyers fall into two categories:
- Those who want to find foreclosed properties for the perceived “deals”
- Those who want to avoid foreclosed properties for the perceived “problems”
We use the word “perceived” because both of these statements can be wrong.
Lenders are not offering their properties significantly below market value. They might be priced more aggressively, but they are not cheap. The lender uses market data and appraisals to determine the market value and then list the homes on the lower end of the scale.
While this might be a little lower than the home down the street, they also are firm about the terms. Buyers are not always given closing costs credits, repair credits or home warranties. The homes are sold “as-is” and often they are not even offering termite reports or repairs. This can add thousands to the buyer’s costs and eliminate the value of the lower sales price.
Buyers who want to avoid foreclosed properties could be making a mistake as well. While it’s true that often the condition of foreclosed homes is not turn-key, they may not be the problem these buyers anticipate. While the contract will use the term “as-is” that does not eliminate the contingency for home inspection. The buyer is still entitled to do all their due diligence in determining the condition of the home.
If the inspection uncovers issues, they can still be addressed with the lender. Depending on the severity of the problem you might still find a lender willing to make repairs or provide a credit. These issues could include:
- Mold and other water related issues
- Electrical problems
- Structural issues
The cooperation of the lender should not be assumed, but they certainly realize the same problems uncovered by this buyer will be found by the next. They might determine it’s better to close with the existing buyer than to risk a larger loss on the next one.
The buyer of a foreclosed property has the same right to investigations as other home sales. There is also an advantage to working with an impartial bank that is not using emotions as they navigate through the transaction. If it makes financial sense to the lender, they are likely to do it. Each situation is unique. Some bank-owned properties are great deals; some should be avoided at all costs. But as part of the home hunting process, foreclosed properties should be included and evaluated individually.
Hiring an agent like those of us at The Murray Morris Group can help you on your search for the perfect Richmond, Virginia area home. If the one you fall in love with is a foreclosure, we have resources available to assist you in finding exactly what you need to make a decision as to whether this is the perfect home for you and your family.
The Murray Morris Group specializes in catering to the needs of each and every one of our clients. You can read their testimonials here. Put your trust and valuable time in the hands of industry experts! Your results will always be the best they can be! Give us a call today! We’ll work diligently on your behalf by putting your needs at the forefront of every transaction.
Shannon Murray & Scidney Morris
Contact us at 804-874-5030 or email mmg@themurraymorrisgroup.com
Legendary Service | Exceptional Results | Clients for Life!
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