For the banks, it’s all business. There’s no emotion attached to the price or to the home on their part. If the numbers make sense they’ll make the deal, and if they don’t, they won’t. First things first though. Before your offer is accepted, we’ll need to get you a pre-approval letter.
It’s also important to keep in mind that what you see is what you get. The home comes as-is. All repairs or improvements are completely up to you as the buyer. Foreclosures are considered “distressed” properties because of the financial situation of the owner AND because of the physical condition of the property. Chances are that if the owner wasn’t able to stay current on the bills, they weren’t able to stay current on maintenance or repairs either. It’s easy to get caught up in the excitement of bidding but it’s important to consider the repairs and set a maximum price you’re willing to pay. Repair costs can be financed with an FHA 203(k) renovation loan.
You can get a bargain on a foreclosure but it can be a roller coaster of going through a lot of homes and writing a lot of offers before you get what you want. With a short sale, for instance, when the property enters pre-foreclosure, which is somewhat of a grace period, the owner has several months to pay off the default amount. So, you can make an offer but it could take a while before you have an answer and it may not be the answer you want. Together, we can look at how long it takes to sell a home in your price range as well as comparable sale prices.
Bottom line: Buying a foreclosure is a complex process that can result in a significant return on investment when done right. It’s not something you want to approach carelessly. Let us help you so that you don’t make a poor decision and end up upside down. What’s nice about them is that you can usually find a listing in a neighborhood that you may not be able to afford normally. For resale value, as “they” say, it’s all about location, location, location.
Only about 7% of homes being sold in the Rogue Valley are foreclosures. Let me know if you’d like me to help you purchase one.