I was showing pre-foreclosure property to a client recently when she asked a very good question, "how as-is is it?"
When one purchases a resale home, one has the opportunity to request repairs and see if the seller is willing to make them. Bank-owned properties are somewhat different in this regard. Though it's possible to ask for repairs, it's unlikely that such requests will be granted.
Most properties that have been foreclosed upon are sold "as is". That means the buyer will be purchasing the home without a guarantee that the property will be improved beyond the state it is currently in. In some cases, the property could undergo further damage.
Depending upon state law, the buyer will most likely be allowed an inspection period. Though each contract is different, Arizona buyers may typically cancel a purchase if they discover that the property has issues larger than meets the eye. We know such things by hiring a licensed inspector who is able to provide details regarding the property's condition.
There are many pre-forclosures and bank owned property on the market these days. I've noticed that it has become easier to find property that is in surprisingly good condition. Times like these allow people to purchase far more "home for that money" than in previous years.
All who purchase such homes should take into account a few things before purchasing:
- What repairs will the property need?
- What will the repairs cost?
- What's the price difference between the repaired home and other homes currently on the market?
Sometimes the buyer discovers that the "deal" requires more time and effort than other nearby homes that are in better condition. A good real estate agent and home inspector will be able to assist you in this decision making process.