Home Buying in Chicago>Question Details

T. Ross, Home Buyer in Chicago, IL

In this market, should one purchase a foreclosure listing to get the best deals? Please advise!

Asked by T. Ross, Chicago, IL Mon May 26, 2008

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One thing to remember is that in the case of a foreclosed home, the owner did not leave willingly or happily. Some times they take out their unhappiness on the house (smashed plumbing fixtures, leaving the house with the water running--you get the idea.) You also could inherit liens on the home--unpaid utility bills or taxes.

A short sale--where the seller is selling pre-foreclosure--often offers an opportunity for a good price, but you will need an experienced real estate agent and a real estate attorney with experience in short sales to help you through the process. Don't attempt it without this team in place or it may be too stressful.
1 vote Thank Flag Link Mon May 26, 2008
Some REOs represent good values. Others don't. And if you limit yourself to REOs (and even include short sales in the mix), you're still eliminating perhaps 90%-95% of the market. And there are plenty of good deals there, too.

So, don't overlook REOs and short sales. But, no, the best deals aren't necessarily (or even almost always) there.
1 vote Thank Flag Link Mon May 26, 2008
Don Tepper, Real Estate Pro in Burke, VA
MVP'08
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Not necessary, I won;t limit myself for foreclosed properties. Due to the soften market, a lot of sellers are pricing their properties very competitively if they are true sellers. There are a lot of great deals out there on wonderful properties. One of the risks you will get with foreclosed property is that you don't know the condition of the home and they are often sold AS IS without proper disclosures.

I would include all the homes in my price range, look and compare each and every one of those, foreclosed or not, then determine the best house to buy.

By limiting the search, you are only limiting the potential...

Sylvia
0 votes Thank Flag Link Sat May 31, 2008
Sylvia Barry,…, Real Estate Pro in Marin, CA
MVP'08
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I certainly would! If you know your market area very good or have a Realtor that does. Also consider purchasing a short sale property which is a property in pre-foreclosure and still functional.
Web Reference: http://panhomes.com
0 votes Thank Flag Link Fri May 30, 2008
I find that many consumers believe that there are great foreclosures at amazing prices that are somehow being kept from them. What most people don't realize is that even a foreclosed property is still going to be sold for market value. In foreclosures the lender is often losing money, they don't want to lose mroe by undervaluing the property.
0 votes Thank Flag Link Fri May 30, 2008
Foreclosures are very complicated. They take a substantial amount of cash and patience. If you have worked with someone closely that has handled 2 or more, then maybe.
Otherwise, I have found that the same bargains can be found among regular listings. In fact, in a townhome complex near me, unit # 224 sold for $520,000. It was a 3BR/2BA on the marina with a boat slip behind it. It was remodeled with grantie counters, new appliances, etc. The seller was under pressure to sell and dropped the price by over 5%.
The place next door, #223 has been foreclosed on. The bank bought it back at $490,000. It will need at least $45,000 in repairs + back fees to the townhome assocation.
0 votes Thank Flag Link Mon May 26, 2008
You need to have your realtor run comps on the homes you are interested in. People assume that foreclosures are always the best deal. That is not true in every situation. Just evaluate the competition and recent solds for that area to determine the market trends. Individual sellers are much easier to deal with than banks in my opinion. With an individual you can negotiate price, repairs, closing costs, etc. Best of luck!
0 votes Thank Flag Link Mon May 26, 2008
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