The bank did NOT purchase at foreclosure. It simply took the property back because prospective buyers concluded that it had little or no equity, relative to market value, and so no one submitted an acceptable bid.
Stay away from foreclosures unless you are a pro â€¦.. in which case you play in the pre-foreclosure market, not in the REO market.
Leopold A Rodriguez
400 Montgomery 505, San Francisco 94104
Single Agency Broker 00849905
Attorney at Law 43062
1) Closing Costs. The buyer typically is responsible for closing costs which run between 2-4% of the list price. The Bank will sometime cover some or all of closing costs, but again this is a negotiation. Sometimes the bank will also just tack on the closing costs to the asking price. My feeling is that it never hurts to ask for closing costs.
2) Deferred maintenance. Many of the properties go into foreclosure because the owner can not afford the mortgage which often means they can not afford to maintain the property and when they are going to lose the property a lot will stop maintaining the property properly as they know it is going to the bank.
3) Liens. Often times there are deferred tax payments, potential mechanic's liens (ie a contractor who did work to a property and has not been paid yet), or other liens against the property for the same reasons as mentioned above. Although the bank will usually bring the taxes current, it is always a good idea to carefully go through the title and make sure all taxes and liens against the property are current.
GB and Associates
Are you looking at foreclosures listed with a Realtor or talking about buying at auction?
If at auction you will need all cash, be bidding against veteran investors, the price will be the highest bidder, you could have issues with clear title, and you won't be able to do inspections.
If you are talking about properties listed on the MLS none of those things apply, but the final price will likely be higher as most properties in San Franciso are getting overbids. Additionally, the buyer is responsible for paying closing costs, appraisal if wanted, and inspections if wanted.
Foreclosures are also different in terms of process, so you want someone helping you who knows how to handle them. We have done a lot if you want some info.
Lance King/Owner-Managing Broker
King Realty Group