Buying a foreclosure
This is the fourth column on this series. How to buy a foreclosed home.
Though there a lot of bank owned properties available these days, trying to buy one can be risky. With a conventional home purchase, you have all sorts of protections against being taken, but in a foreclosed deal, it’s buyer beware. Here’s how to investigate such property:
Skip property
that charges a fee
Most foreclosure Web sites charge for their listings. But you can get information on foreclosed properties in your area free from local agents who specialize in foreclosures in that office.
Banks may put their foreclosed homes up for bidding at auction or simply turn them over to a real estate broker. If the property has been on the market for less than 30 days, lenders are usually looking for full-priced offers. After 30 days they may be willing to accept a lower price. After 60 days you can offer even less.
Pay for a detailed home inspection
This is always a good idea when buying a foreclosed property. Vandals may have stripped fixtures and appliances. What’s more, the utilities probably have been shut off, making it impossible to gauge the shower pressure or test for leaky pipes. If that’s a concern, try to negotiate to have the utilities turned on for inspection before you close on the home. A home inspection usually runs from $250 to $400 and can save you a lot of money if something’s wrong with the home’s structure or systems. You need to know what repairs you are on the book for to determine if the price is fair.
Beware, a ‘sale’ might not be final
Don’t rush out to buy furniture. Some states have a redemption period that lets the original owner (I have a lot of out-of-state owners) satisfy his or her debt and take back the home during a specified period after a foreclosure. For example, a homeowner facing foreclosure because of unpaid homeowners’ association fees might have up to 180 days after a foreclosure notice to pay the fees and reclaim the home, even if it has been “sold.”
Have patience
Banks may take up to 60 days or more to decide whether to accept you offer. “We see a lot of these deals fall through because buyers don’t want to wait.”
Consider title insurance
Even if you aren’t getting a mortgage, you might want to buy title insurance as protection aginst liens that weren’t disclosed or discovered. It also prevents someone like a ex-spouse of the previous owner from making a successful claim on the home after it’s sold.
Had to make it short this week we are running a 3-day special and it must be in NOW! Next week advice for owners and why not to over re-model.
Have a real estate question? Write, call, fax or e-mail:
Bob Jeffries, Realtor,
Century 21 Birchwood Realty, Inc.
4040 Del Prado Blvd., Cape Coral, FL
239-540-6659 Office 239-542-7760 Fax