Foreclosures Not For the Faint of Heart
Buying foreclosures is not for everyone. If you have time constraints, are short on patience and do not have a super dedicated REALTOR, you may be entering a nightmare.
We all know that when we enter into any type of transaction that originates with the government, there is only one way to process the transaction, their way. Buyers must have a REALTOR who knows the programs through which the foreclosure is offered. And we all know, in this instance, that our time line does not matter. A good example of a buyer who should avoid HUD or VA foreclosures is one who has a specified date by which he/she must move into his/her new home. If this buyer does not win the bid in the heavy bidding competition, he/she must find another property and begin the process all over again. With HUD bids, there is 10 days after listing until bid opening date, so losing on bid opening date means another 10 days to wait for bid opening date on the next one.
VA and USDA government housing programs each have their own different twist from the HUD foreclosures. Bank foreclosures all seem to be very similar but each bank has its’ own rules and regulations also.
Can buyers save money on foreclosures? My best answer for this question would be, it depends….There are so many factors in a real estate transaction where one can save a little money here and there and, every once in a while, there is just a great house in great condition with a great price. In this case, you need to be the first one to see it and offer exactly what the bank is asking or even more because there will be other offers. You will not be the only Buyer who wants it.
The real key to buying a foreclosure property is to have a REALTOR who represents you and who has foreclosure experience in the type of foreclosure you are seeking.
Most Buyers believe that they can get the best “deal” by concentrating on foreclosures. This is not the absolute truth. Just because a house is a foreclosure and seems to be priced lower than market value, does not make it the best “deal”. Many foreclosures have been abused. How much out of pocket money will it take to bring it to a condition that you require?
Take the great house, great condition and great price foreclosure property and place yourself in the “bidding war” and you will soon see that the buyer who won the bid, most often did bid current market value and I have seen these bids be even a little higher than market value. The competition caused the price to be at market value or higher. There are always re-sale homes listed for sale by homeowners who have priced their home to sell and have prepared it to show beautifully.
In my opinion, buyers should never decide to buy a foreclosure property and only see foreclosures. REALTORS will usually advise them to look at re-sale homes as well. If there is a foreclosure in the list that is truly a good deal, then that is great but, more often than not, I have seen buyers buy the home they want whether it is a foreclosure or not.
