Buying a Foreclosure

PRICE: Typically, the listed asking price is within 10% of what they will accept.

INSPECTIONS: Often the power and water has been turned off. If the Bank allows, the buyer could pay to have it turned back on or a daily fee to do inspections. Some banks will not allow this due to the home being winterized. If the home has been winterized, there is a higher risk when purchasing as systems may be inoperable or at very least have not been in use for some time. All foreclosure contracts are as-is. There are possible issues for FHA or VA buyers. These loans require a clean WDO inspection to approve the loan, the bank often will not do any of the repairs required for the home to receive a clean bill of health.

CONDITION: These homes are typically in poor shape. The home may have been empty for a long period of time and many previous homeowners take out their frustration on the property and leave it trashed.

APPLIANCES/FIXTURES: Sometimes the home is stripped of all appliances, ceiling fans, light bulbs, mirrors, etc. This often increases the cost of ownership as these items would need to be purchased outside of the contract.

TIMEFRAME: Banks can take between 48 hours to 2 weeks to respond to an offer which is quite a bit longer than typical. Outside of that it, can also take longer to close on the home so the process tends to be quite a bit more drawn out.

OTHER OFFERS: The home may still show as available on the MLS even if there are offers on the table. The bank wants a bidding war which tends to drive up the cost.