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Answers (9)
- Wes Black
- Contributions:509
I believe that you do get a better price after the homes have been foreclosed on. Problem is what has happened to them while they were vacant. I know you have always heard that things just break or misfunction, especially plumbing when they are not used regularily. The condition at the time you buy and your willingness to spend the money to repair pretty much determines whether you are getting a good deal. With that said, get lucky, and you could be a real winner.
- Rita A. Walker, "Rita Walker"
- Contributions:277
Realize that foreclosures usually sit for a period of time while the legalities take place. They sit with utilities off. Basements may get water in them which may do tons of damage. They may get vandalized. They may have animals taking up residence.
Many times you do not see those things because the bank sends in a crew to spruce things up. So, if you do not know what you are doing it may end up more than you can handle.
Make sure you have a qualified Home Inspector check the home. You may want an Electrician and HVAC professional in there also, prior to purchase.
I believe the better value is in a short sale. Work with a Realtor that knows what they are doing in a short sale situation or it may not be a good deal at all.
Many times you do not see those things because the bank sends in a crew to spruce things up. So, if you do not know what you are doing it may end up more than you can handle.
Make sure you have a qualified Home Inspector check the home. You may want an Electrician and HVAC professional in there also, prior to purchase.
I believe the better value is in a short sale. Work with a Realtor that knows what they are doing in a short sale situation or it may not be a good deal at all.
- Erik Pearson, "SpringHillHomes"
- Contributions:36
I haven't seen stats on it, but I would guess that buying a short-sale is more likely to be a great buy because banks have more expenses tied up in the house once they've foreclosed.
- Angie Boggeman, "angie boggeman"
- Contributions:469
Better deal compared to what it was listed for before (short sale)? Keep in mind, the majority of foreclosures need work and are being sold in as-is condition. Inspections are still an option, what you may have to have the utilities turned on in your name for the time period of the inspections. Also, if the property is winterized you may have to pay for dewinterization and rewinterization.
- Bert Pope, "bertpope"
- Contributions:66
This is a question I am asked a lot in Florida.
All Bank foreclosures have to be valued at fair market value as determined by an appraisal or BPO(Brokers Pricing Opinion). The federal government audits the banks to see if the sale was within the value range.
Now, from what I have found with most forclosures(excluding local lenders) is that they will not negotiate much, maybe 5% or so, for the first 60-90 days. Then the price will drop some. But the longer it is on the market, the better the negotiations are.
Just keep in mind: value is relative, whatever work it needs, you have to look at that cost, plus time and effort. That is cold cash out of your pocket to update a property.
The best, most unbelievable buys I've seen, were FDIC auctions and Owners that need cash and own the property out right.
In Miami you really need to watch yourself with the condos, there are fantastic perceived deals there. But, the deferred maintanence burden from all the foreclosures on the buildings is huge, due to the lack of income from all the foreclosures. Banks, by Florida Law only have to pay up to 2 years of back condo fees. Someone is going to have to pay, dont let it be you.This is where a good local realtor can help you alot.
Please don't focus on the seller, if your looking for a deal, focus on the deal. look for that low hanging fruit, it is all around you.
All Bank foreclosures have to be valued at fair market value as determined by an appraisal or BPO(Brokers Pricing Opinion). The federal government audits the banks to see if the sale was within the value range.
Now, from what I have found with most forclosures(excluding local lenders) is that they will not negotiate much, maybe 5% or so, for the first 60-90 days. Then the price will drop some. But the longer it is on the market, the better the negotiations are.
Just keep in mind: value is relative, whatever work it needs, you have to look at that cost, plus time and effort. That is cold cash out of your pocket to update a property.
The best, most unbelievable buys I've seen, were FDIC auctions and Owners that need cash and own the property out right.
In Miami you really need to watch yourself with the condos, there are fantastic perceived deals there. But, the deferred maintanence burden from all the foreclosures on the buildings is huge, due to the lack of income from all the foreclosures. Banks, by Florida Law only have to pay up to 2 years of back condo fees. Someone is going to have to pay, dont let it be you.This is where a good local realtor can help you alot.
Please don't focus on the seller, if your looking for a deal, focus on the deal. look for that low hanging fruit, it is all around you.
- Appraisal guy
- Contributions:120
No you don't. Banks hire appraisers to get 4 different values "as is", "as repairs" "as is 90 days marketing time" and as repairs 90 day marketing time. And many times they will hire several appraisers. This means they fully understand the value and the condition of the home. Some banks may want to just get ride of the home. But many banks will sell for what they can get and you will be the proud owner of someone else's problems and mess with no real equity.
- Brian Teyssier, "Brian Teyssier GRI"
- Contributions:964
I agree, the answer is "it depends". One cannot give an answer without the details. Do you mean foreclosure vs. pre-foreclosure or foreclosure vs. short sale, etc???
- Wes Black
- Contributions:509
Sometimes. It depends on the buyer's view of what is a bargain. Most important is the condition of the house you are buying.
- Katherine Cannon, "highheeledhomeowner"
- Contributions:107
People like to think so, but not necessarily. Traditional resales have to compete with foreclosures. If a bank owned home sells for $250k in a neighborhood, then a similar home in the neighborhood is then also worth $250k, not 10 or 20% more... Also, keep in mind that banks will probably not repair anything that comes up in an inspection. Good luck!
Do you get a better deal after a property has been foreclosed on?
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