With the housing market still mired in tough times, deal-conscious buyers are hot on the trail of foreclosed homes. While most buyers understand the risks (hidden costs, possible continued lost value after closing), the most publicized method also holds the most risk: Auctions. Or, better known as REO. Real Estate Owned by the bank.
To avoid some institutional slight of hand, here are 4 ways to protect, and educate yourself:
As-is means just that. As-Is: Bank have little time or interest in repairing damaged properties after listing with a realtor. Any updates or repairs made by the bank (and don’t count on a lot of them) will be done prior to being listed for sale. Don’t go into a home, see damaged plumbing, and presume “the bank will fix it”. Have your own contractor or service person with you before making any offer. Banks may actually lower the asking price in light of professional input.
Speak and Disclose No Evil: In short, many states do not require banks to make disclosures about a property’s condition, opting instead for the simple, across the board “no knowledge of condition” statement in any listing. Having your own inspector check it out can save time, money, and frustration later.
Changing of the Terms: Most local real estate markets operate by differing guidelines and how they do business. Similarly, so the banks. The listing realtor may state to terms x, y, and z (signatures, disclosures, etc.), however, the involved bank may add, eliminate, or amend any such terms. Read every detail of contractual language before touching pen to paper, and ask your banker, attorney, realtor, or broker questions on anything that needs clarification. Taking the time to do this is very important.
Expect the Unexpected: Like anything else, this is a general, solid guideline for foreclosure buyers. You may, and likely will, encounter schedule changes, multiple escrow providers, even price changes during the process (intended to see if other buyers will be prompted by the new price, as opposed to your offer). Having realistic expectations can sometimes be more helpful than anything. The process may take time, however, deals are out there for the educated and patient.
Information provided by Jeffrey M. Nocera, Proprietor of ProHome Asset Inventory. Visit our website at www.prohomeasset.com for additional reasons you need a home or business inventory. You may also email us directly at firstname.lastname@example.org.