In real estate investment, one person’s misfortune is an other’s opportunity. Indeed, with many foreclosed properties on the market, buyers are poised to take advantage of a literally once-in-a-lifetime chance at investment or ownership.
Every opportunity presents some challenges, however, and you’ll need more than luck to effectively buy a distressed property. These transactions are more complex than traditional sales, and you are strongly advised to seek the advice and representation of a real estate professional who is well versed in this new marketplace.
While a bank-owned home may look like a great deal, don’t assume that any offer will be accepted. Banks list their foreclosed properties through real estate companies, and while they want to sell as quickly as possible, they expect to receive reasonable offers. When a property is listed at a great price, there will most certainly be multiple offers. It is not unusual to see the final sales price coming in several thousands of dollars over the list price.
An insultingly low offer will just be ignored by the bank, so proceed with common sense and a trusted representative. Keep in mind when negotiating your offer that you should have additional money set aside for repairs. A foreclosed property, particularly an older one, will almost certainly require repairs.
If the property was abandoned by the previous owner during the winter, the home may have broken pipes. Usually they abandon the property without notifying the bank that holds the mortgage. They turn off the utilities when they move out without draining the pipes or winterizing the property, then the temperature drops and the pipes freeze and burst. Many times the previous owners take their anger at the bank out on the home by damaging the interior of the property.
A foreclosure home can be a great investment if you’re willing to put your time and effort into making it a viable home again. Talk to your lender to get your pre-approval, then call an experienced agent and start building your nest egg.
Contact the Kathy Henne Team RE/MAX FINEST by calling (937) 778-3961.