Foreclosure in Houston>Question Details

J.P., Home Buyer in Tampa, FL

What are the benefits or drawbacks to expanding my home search to include FSBOs and foreclosures?

Asked by J.P., Tampa, FL Mon Apr 23, 2007

How does the buying process for foreclosures or FSBOs differ from homes sold by agents?

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A wise buyer always considers all alternatives. Your Realtor can guide you through the Houston market. FSBO's and Foreclosures require more diligence on the part of the buyer, because the property condition must be scrutinized by your inspector. Foreclosures often prohibit option periods for inspection, so be prepared to pay for inspections before you contract on the house.
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1 vote Thank Flag Link Wed May 23, 2007
J.P. ,
You have already been told most of the draw backs of FSBO's and Foreclosures.
Condition can range from one end of the spectrum to the other. Most FSBO's are in excellent condition, some are not., Most Foreclosures have been trashed, some have not.
I don't know about Fl. but in Texas as a Buyers Rep. it is my duty to approach FSBO's for you if they fall with in your search citerier.
I don't know about the rest of Houston.but here in Montgomery County there are foreclosures in Bentwater, Walden, April Sound , Downtown, Magnolia, The Woodlands - some VERRRY desirable areas.

Just get yourself a good agent, tell them what you want and how much you want or don't want to spend and go house shopping.

Margaret
0 votes Thank Flag Link Wed May 21, 2008
Foreclosure can seem like a good opportunity to some, however there are limited resources available to you such as information on property, or negotiating power when you are dealing with a foreclosure. FSBO also does not afford you the opportunity of dealing with an objective seller.
0 votes Thank Flag Link Mon Apr 23, 2007
FSBO's may have different reasons for not listing with an agent. Usually it is to not pay a commission. Many times it is to maintain control of the sale. Most times, FSBO's don't know the market as well and may tend to not be as realistic in their pricing. Foreclosures may or may not be a good deal. You really have to do your homework, have the home inspected, have contractors bid out repairs to make sure you are not purchasing a money pit.
0 votes Thank Flag Link Mon Apr 23, 2007
Your home search may be somewhat limited if you choose these avenues; however, you will receive a wider range of home selections if you work with an agent. The difference in working with an agent versus FSBOs or foreclosures is that you will have an opportunity to work with someone with extensive knowlege of the real estate industry. More importantly, you will have the help and guidance you need from an agent who fully understands the buying process.
0 votes Thank Flag Link Mon Apr 23, 2007
The foreclosure market can be a difficult one to purchase in if it is an auction property. It is imperative to visit the property you are going to make an offer on and if it is a condominium know the fiscal condition of the association. Some of the foreclosures are not priced below the market particularly if they are properties that were refinanced. FSBO's can be overpriced or underpriced. It is important to have a market history of the area.
0 votes Thank Flag Link Mon Apr 23, 2007
When searching for FSBOs or foreclosures you want to make sure you understand the process and have proper advice/instruction to insure everything goes smoothly and is handled properly with the purchase of your new home. There is typically more paperwork to complete when purchasing a foreclosure and the process usually moves a little slower. Potential benefits are getting a good 'deal' whereas drawbacks are you may not realize it is not a good deal until it is too late. If you are not familiar with real estate transactions, neighborhoods or the process itself, you should always work with a real estate professional to insure transactions are conducted in your best interests.
0 votes Thank Flag Link Mon Apr 23, 2007
Homes that are offered for sale by owner are very hard to see since they are not on multiple listing services and the owner must be home. The FSBO's are usually not a bargain - both parties think they are saving the commission and there is no professional to help with the transaction. In foreclosures, the buying process is again different. The homes are sold 'as is' and the condition of the home can change before you get to the closing table. In a foreclosure you are dealing with the mortgage co. or the bank, not a homeowner.
0 votes Thank Flag Link Mon Apr 23, 2007
I don't see any drawback to expanding your home search. A good realtor can assist you with FSBOs and foreclosures as well has homes listed with a realtor. Although there is not really a drawback, I have found that most foreclosures are in very bad shape and a great deal is hard to come by. Clients of mine that tell me they are interested in foreclosures usually do not end up buying one.
0 votes Thank Flag Link Mon Apr 23, 2007
I'm going back to the importance of having good representation to complete the research and to guide the purchaser. There are additional documents required in the purchase of a foreclosed property, plus there are no sellers disclosures, but a your Agent should provide you with the name and number of a good inspector, so that you won't go into the purchase blindly. As for FSBOs, representation is essential because most FSBOs do not understand the enormous legal responsibilities inherent in the sale of property. Drawbacks inherent in this type of sale include: lack of knowledge on seller's part as to legal responsibilities, disclosures, title, and the all important question of who pays what fees. All in all, there is less stress, and a smoother transition, on the part of buyers who purchase from an Agent.
0 votes Thank Flag Link Mon Apr 23, 2007
Here in Houston, we find very few foreclosures in desirable neighborhoods and in acceptable condition. Sometimes, foreclosures can be a good investment purchase if the buyer is willing to make repairs and use the property as a rental. Lenders are very strict in obtaining information about the buyer's financial qualifications, and typically offer absolutely no recourse, not even mediation, should an undiscovered defect be found after the closing. FSBOs, or 'For Sale By Owners' will nearly always work with a licensed agent, and the procedures are the same. In dealing with 'For Sales By Owners' a buyer is best protected by working with his/her buyer's agent because FSBOs are not aware of the laws governing real estate transactions in Texas.
0 votes Thank Flag Link Mon Apr 23, 2007
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