Foreclosure in Davenport>Question Details

Worrall, Home Buyer in UK

I have noticed there are a lot of foreclosure properties available, what are the pros and cons and are they

Asked by Worrall, UK Mon Jan 28, 2008

restricted to US citizens only?

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4
Chrissi Jasso’s answer
I would answer this a little differently. I sell many foreclosed homes that need many repairs, but that is apparent when you view these homes. Others may need very little if any work at all. I sell many homes that are in move in ready condition as bank owned homes. A home inspection is always recommended when buying any home, but especially a bank owned due to the lack of a seller's disclosure. International customers purchase foreclosures all the time, via cash or financing. You often can get a great deal in price if the home does need repairs, and you are willing to take on that work in exchange for the lower price. Normally the repairs needed are general cosmetics, flooring, paint, appliances, and minor upgrades. Good luck on your home search!
0 votes Thank Flag Link Sat Sep 3, 2011
There are alot of Pros and Cons in buying Foreclosures. The biggest con is the condition of the property. The bank will be selling the property "As Is". That means you buy the good and the bad, get an inspection period to check the property out. Sometimes you'll get it sometimes you won't. You have to evaluate each property and the profit potential to see if it makes sense for you personally , it depends on what you intend to do with the property If you are buying way under market to sell to someone else, or to hold and rent , or if you are going to fix it and live in it . Now the Pros; you can get a great house, that needs work, for a greatly reduced price. Prices will recover in the next year or two and you can have that equity just waiting for you. I recommend (3) things: 1) Look for REOs that are something you personally would not mind living in when fixed up ; 2) inspect to develop a scope of work for repairs; 3) Have a licensed contractor give you and estimate on the repairs until you are able to gage this for yourself so you dont forget things , there are always going to be gotcha's but you need to minimize those if at all possible to protect your profit margin .Hope this helps some
0 votes Thank Flag Link Sat Sep 3, 2011
Hi Worrall,
There are alot of Pros and Cons in buying Foreclosures. My brother and I buy foreclosures (REOs) in California. The biggest con is the condition of the property. The property is in bad shape and needs lots of TLC. The bank will be selling the property "As Is". That means you buy the good and the bad. We always try to get an inspection period to check the property out. Sometimes we get it sometimes we don't. You have to evaluate each property and the profit potential to see if you will move on the deal. Now we are investors so we are buying way under market to sell to someone else. And that brings up the next con: property value. Usually their are not a lot of houses selling in the area where we are buying REOs. This makes it hard establish the "After Repair Value" (ARV) of the property. The ARV is what the house would sell for at retail when it is all fixed up. We actually look at the past years values; like what were houses selling for 3 -4 years ago. We do not think the market, even in the Central Valley of California, will sink below those values.

Now the Pros; you can get a great house, that needs work, for a greatly reduced price. Prices will recover in the next year or two and you can have that equity just waiting for you. I recommend (3) things: 1) Look for REOs that have been on the market at least 60 days in a mature area; 2)have the property inspected to develop a scope of work for repairs; 3) Have a licensed contractor give you and estimate on the repairs and subtracted from the ARV along with a hassle fee for your time to fix-up (10 - 15%) the property. You will have to make a lot of offers to one accepted but that one will be on your terms and will pay-off in the end. Good Luck.
0 votes Thank Flag Link Sat Mar 8, 2008
No, everybody can buy Real Estate in US (including foreclosed properties). It would be more complicated if you need a loan from US bank.
0 votes Thank Flag Link Thu Feb 28, 2008
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