Home Buying in Bakersfield>Question Details

Michael Perry, Home Buyer in Bakersfield, CA

How difficult is it to buy forclosed or bank-owned properties for cash?

Asked by Michael Perry, Bakersfield, CA Wed Sep 12, 2012

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If you are buying foreclosed or bank-owned properties (REO) for CASH, you would have the upper hand because you would not have an appraisal issue and you would be able to close on the home quicker which banks like. However, with Fannie Mae & Freddie Mac, the first 15 days a property is listed, only owner occupied homebuyers are eligible to bid and purchase before the property is made available to investors. The properties are more often than not sold as-is. Properties under Fannie Mae or Freddie Mac will often undergo some improvements (rehabbed) and will have new paint and carpet. HUD homes will typically not be brought up to par and will need a lot of work. If you are an owner occupant buyer and you are quite handy, this may work well for you as you would be able to negotiate because of needed repairs and buy it at well below market value. With investors, they typically have people who do their handy work for them on investment properties they acquire. It is extremely difficult, as an owner occupant buyer to find properties out there that is in mint and/or immaculate condition. Move-in ready does not mean immaculate by any means. Just know if you do find a gem out there, you will not be the only one that will be interested in it and a property that is a gem will surely sell at way above market value (above comps) because homebuyer emotions will come into play and a bidding frenzy will ensue. Remember buyer's agents are scouring the market for clients who are only interested in properties that are in immaculate condition. I hope this helps. I am an owner occupied cash buyer and I've been seriously looking at homes for the past 18 mos. I finally decided to buy new construction as I was very picky and not very handy either. If you find a gem of a foreclosed home out there and also get your offer accepted by the bank (expect a counter offer as surely as the sun rises in the east) at a really great price you can live with, consider yourself VERY LUCKY. Best of luck on your homebuying.
0 votes Thank Flag Link Sun Sep 16, 2012
Wow!! You couldn't be in a better position. The hard thing is being the first one to get your offer in and make a fair market value offer. Be sure you work with a qualified agent who is familiar with the area and can run comps for you to be sure you are offering a fair price. There are also government foreclosured homes which I personally like because the prices are generally very reasonable (they are already appraised) and all bidding is online which makes it fair for all involved. Give me a call if you want to know more. Dee Oliver - RE/MAX MAGIC 661-747-7763
0 votes Thank Flag Link Wed Sep 12, 2012
Generally speaking, cash buyers are the ones that win foreclosure deals! You should be in good shape!
0 votes Thank Flag Link Wed Sep 12, 2012
Banks and mortgage companies would much rather entertain a cash offer over an offer contingent on financing as those congintent on financing have such a low rate of actually closing.
0 votes Thank Flag Link Wed Sep 12, 2012
Not that difficult, finding the right one is the most difficult part. Cash is King!! Let me know if you have any more detailed questions I can help you with.
0 votes Thank Flag Link Wed Sep 12, 2012
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