All Realtors are in the business of connecting buyers and sellers. That is the only hidden agenda they have, typically. Realtors are paid by the seller to bring a buyer, basically. Occasionally the seller thinks that he will make more money by not offering to pay a Realtor. After the house sits for a while with sporadic activity and strange offers, the seller may contact a Realtor for help.

Realtors with experience in the market understand how to price a house for sale and how to negotiate. There is some truth to the fact that foreclosed homes have been stripped by the previous owners, but not always. It is also true that homeowners who must sell because they need the money are usually not spending what little cash they have on maintenance. This means when the bank forecloses and the seller leaves the deferred maintenance and any damage caused after foreclosure are costs that the new buyer will need to take on. Banks normally do nothing to fix a place up. By law banks are exempt from providing you the buyer a disclosure of the condition of a home, either.

So, do all homes that were foreclosed on need repairs? No, but many do.

Without knowing what was said it would be difficult to pass judgment on the quality of it. You have to inspect every foreclosed home on your own. HUD homes usually have a Property Condition Report that indicates what the HUD inspector found, but this is not gospel, just a good guideline. If the HUD home says that it is not insurable, it means that the condition is below standard for you to get a mortgage and just move in. Some repairs would be required prior to occupancy.

Yes, your assessment that buyers who need to sell and can't find a buyer can wind up in foreclosure. Just remember that they probably didn't keep up the house, either.

As to value versus price, many times a foreclosed home can be more than worth it compared to an existing home sale. The reason is that cosmetically the house may be unappealing and won't fetch top dollar. Or, the repairs may actually cost a much smaller amount than the buyer thinks, and no offers are made because buyers are inexperienced.

If you find the right plan in the right neighborhood at seemingly the right price, ask a knowledgeable contractor who can fix it up to go with you to get an estimate of repair costs, including things not required by HUD. If the fix-up costs plus the house price is lower than the market for the same house fixed up, how can you go wrong?

Hi Kristina,

If a property is listed in MLS, the real estate agent is paid a commission on the sale.

Your observations about foreclosures are also correct, but so is the agent. Foreclosures are not necessarily a great deal just because they are a foreclosure. Many properties stay on the market for a long time because they are not worth what the seller or the lender needs to net to pay off the loan. Many bad loans were made in the past and many properties are not worth what the lenders are trying to get for them. They are often in poor condition because the lenders do nothing to maintain the properties during the foreclosure process. Foundations dry out, leaks go unchecked, and vacant homes are vandalized.

Agents can be reluctant to work with lenders because the lenders will often accept our buyer's offer and then say, "Oh and by the way you will reduce your commission to 1% if you want this deal." Many of the properties on the market are short sales. The lenders will often just sit on multiple offers until they get the one they want. They refuse to negotiate or return calls so agents and buyers often wait months without ever receiving an answer. Agents work on commission so working for months with no commission in sight is frustrating, not to mention a waste of time.

Of course you need to be able to trust your agent. If that trust is there, you should also value their time and their judgment. Understand that it is business decision by an agent to work with you. We are running a business, not a chauffeur service. I give 110% to my clients, but I expect loyalty and an income in return. Find and agent you trust and worth with them. Good luck on your search!

Now is a GREAT time to buy a foreclosed home. You will get a short 5-10 inspection period in which, if there are too many repairs needed to the home, that you can pull out of the contract and still retain your Earnest Money. It sounds like you current agent is fearful and does not understand enough about selling foreclosed homes. Buyers agent DO receive a commission, and it should be listed in their MLS how much they will receive. Foreclosures are normally sold AS-IS, so make sure you do a very good visual inspection prior to placing an offer in on one, as the bank normally states that buyer inspections are for "Informational Purposes Only".