A Site for First-
From our milfordteam.com site
Copyright 2007 -
All Rights Reserved
By Norm Werner
There is no hotter market right now than that for foreclosed properties. The reason
is simple -
Almost all foreclosed properties have some issues, whether they be small ones, like
the affects of delayed maintenance, to huge ones, like purposely damaged systems
and the ravages of vandalism. Many owners did not react well to being foreclosed
and evicted by the banks. Some stripped the house before they left, taking lighting
and plumbing fixtures, as well as all of the appliances and in some cases even the
mechanicals (furnaces and water heaters have been taken in some houses). In some
cases the ex-
At the same time, there are some great homes out there that have not been damaged or vandalized and which may need nothing more than a good cleaning, maybe a coat of paint and a carpet cleaning to allow you to move right in. Those homes don’t last long on the market, so you’ll need to be ready to act if you find one.
If you are intending to look for a foreclosed home, here is some reading that might
help you get prepared before you set out on your search. Some of these pages are
from our sister site -
Where can I go to find foreclosure listings?
What should I consider if I want to become a real estate investor?
The real estate process is basically the same for foreclosed properties as for normal
sales; however, the rules of the game are radically different because the banks are
now dictating their own rules. Whereas in a normal deal the buyers can set a time
limit for a response fro the seller, with foreclosures the banks dictate that timeline
and believe me they take their own sweet time. It can take days, weeks, even months
before yo even get an answer fro the bank on an offer. So don’t be surprised if you
get no response to your offer. Even he listing agents for the banks get upset and
impatient with them, but they can’t do anything about it either. Just like the signs
in the traffic work zones say -
The second thing that you should expect is that you will get no disclosures from the banks. In fact they will go out of their way (usually with lengthy documents) to basically say “we know nothing”. You will be expected to sign their lengthy document that states that and also excuses them from any liabilities for anything that you may find later. They do encourage you to get an inspection and that is an ABSOLUTE MUST when dealing with foreclosure homes. In most cases, the inspection is your one and only out from the contract.
Don’t expect them to fix anything. They don’t want to put more money into the house. They just want out from under it. So,if you find mold or structural damage or anything else that would require money to fix, they just aren’t going to do it. Depending upon where they have he house priced, some banks may offer to reduce the price a bit more to keep you in the deal, but most are just going to tell you that the house is being sold “As Is” and that’s why the price is so low to begin with. Your only option is to walk away. If the issues are big enough, that is a good option.
If the property is in good enough shape to proceed, the next thing to look for are hidden costs from such things as unpaid taxes or unpaid water and/or sewer bills. Also look for unpaid bills to tradesmen, who may have filed a lien on the property. Also unpaid dues to homeowners associations can come back to haunt you. The title company should find these things during the title search, but don’t count on it. Do your homework at the township and county offices to avoid surprises later.
A final thing to consider is the taxes on the property. Many foreclosed houses have
become non-
Foreclosure web sites: Here are some sites to visit for more on this topic.