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Recently, one of my customers asked me if it was difficult to buy a foreclosed home. I thought everyone could benefit from my response.
Here it is:
Buying a foreclosed home is not difficult at all, as long as the property is already on the market. In fact, in many cases it is easier because there are no emotional ties involved on the part of the seller, only the bottom line.
Be aware that many banks hold onto foreclosed homes for several years before putting them on the market so not to inundate it–that is why sometimes you will see homes listed as foreclosed or in pre-foreclosure, on sites such as Zillow and many others –before they are actually available. There is no way of finding out how long this time period may be, so if it isn’t on the market, my advise is not to wait.
At times, an REO (real estate owned property ie: foreclosed) is priced below comps. Bear in mind that banks are not in the business to lose money or to hang on to property. Pricing below comps is sometimes a strategy to procure multiple offers and often results in a sales price well over the listing price. Usually, the banks have already conducted three BPO’s (Broker Price Opinions–I used to do these and they are similar to appraissals) and one full blown appraissal, so they know exactly how much a property should go for, and this is what they hope to sell the property for. I can tell you what the market value is and we can go from there. At times, you may get a few thousand off, but no different than regular sales any more. We can discuss on a per property basis.
If you are purchasing any property and mortgaging it, the bank will require an appraissal, so the property must qualify for you to be able to buy it with the mortgage, unless you put the difference up in cash. And this is covered in the Florida Real estate contract. The bank will always have addendums and these superceed the Purchase and sale contract, so as your Realtor, I’ll make sure everything is in order.
Hope this helps. When working with me, I will always look for the best value and advise you with my 26 years experience.