Not All Foreclosures Are Golden Opportunities

By
Real Estate Agent with Coldwell Banker Residential Real Estate

The homes for sale inventory may offer a large selection of foreclosure opportunities, but sometimes an inexpensive home can cost you plenty.

We've heard stories from other agents about home buyers who have had to make offers on a number of different homes because the home inspection reports came back full of high ticket repair items. These issues ultimately made the cost of the home not only prohibitive, but quickly took the "great" out of the "deal." (Besides, many REO (real estate owned) properties carry an "As Is" status, so you can't even negotiate repairs.)

Great neighborhoods and gorgeous homes can harbor some overwhelming issues like leaks that have gone unattended creating structural and mold damage, and a host of other little things that turn into big things when a home is abandoned.

Oftentimes a distressed home owner has other priorities that don't include conducting their property maintenance checklist and spending money on things like gutter cleaning, window caulking, roof repairs, pool upkeep, and other run of the mill repairs.

The other reality is that people who are planning their strategic foreclosure or are filing bankruptcy are not necessarily going to be concerned about the future value of their home. They've already deemed it without value as they no longer intend to pay their mortgage; so therefore, they don't tend to the property.

In this market sometimes you really do get what you pay for and a $300,000 home for the price of $100,000 may be worth just that and you'll need to pump a lot of money into the home to repair and restore it to its former glory.

Regardless of an incredible opportunity, always have a thorough home inspection conducted by a trusted professional and don't start measuring for window treatments until you have assurance that your new home is what it seems. 

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Rainmaker
606,970
Sheila Newton Team -- Anderson & Greenville SC Real Estate
--Residential/Short Sales/Foreclosures
Berkshire Hathaway HomeServices - C. Dan Joyner

home inspections are a great idea if you are a buyer's agent.. keep in mind though, some banks make you do inspections BEFORE the offer or you can't do them,... you really need a good buyer's agent to buy a foreclosure!!

September 03, 2010 10:18 AM
Rainmaker
259,343
Bill Travis
Broker/Owner
Captain Bill Realty, LLC

Regarding Sheila's comment #1, the banks haven't started that in our area, and I don't think buyers would agree to it. I would advise them not to do the inspection prior to having a contract.

September 03, 2010 10:29 AM
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Rainmaker
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Lori Crawford

Real Estate Consultant
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