Is it difficult or costly to buy a foreclosed property?

Asked by Jessica Hite, New Carlisle, OH Mon Jul 30, 2012

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My NC Homes Team’s answer
My NC Homes…, Agent, Chapel Hill, NC
Mon Aug 6, 2012
It can be very costly to buy a foreclosed property as most require considerable work and you are buying "AS-IS". I have sold many foreclosures over my twenty plus years a s a Realtor and honestly the vast majority are at best fair deals requiring a lot of work and money on my buyers part and in my opinion not worth the effort. Occasionally and I do mean occasionally I'll come across a foreclosure proeprty that really is a good deal but this accounts for less than 10% of all foreclosures.

I've attached a link below with more information about buying foreclosures and I hope you'll read it and that you find the information of some use.

Whatever you do do not buy directly for the listing agent of a foreclosure. Thier relationship, regardless of anything they may say is first and foremost with the bank who supplies them the majority of their business. If you're going to pursue a foreclosure go find yourself an experience buyer broker who will be watching out for your interests.

Good luck and happy house hunting.
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Jessica Eldr…, Both Buyer And Seller, Atlanta, GA
Sun Aug 5, 2012
No, it is not difficult as well as costly too but sometimes by buying foreclosed property you can able to get benefit like low cost of home in the comparison of the new home but it is also true that you should have to spend some money on the repairing.
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Bill Eckler, Agent, Venice, FL
Tue Jul 31, 2012
Hi Jessica,

Normally purchasing a "foreclosed" property isn't any more difficult than going through a regular purchase. The main difference is that with a foreclosure, you are purchasing the property from a bank rather that an individual.

You can plan on using the bank's contract form and perhaps a few additional forms but your agent should be able to easily walk you through the process without difficulty.

Consider working with an agent that will represent you personally....someone seperate from the bank.

Good luck,

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Grace Siefer, Agent, CENTERVILLE, OH
Tue Jul 31, 2012
It all depends on if the bank process has been complete and the home is on the market for sale. Then you have to see the house to make a determination on its condition, if it looks like it wont need too much work, then it would be a normal process. Howeve, it the house is in need of lots of repairs, then it get complicated because it would mean you would have to qualify for a 203k loan to make the home babitable, other wise your lender would not approve a loan on a home that needs lots of work without ther 203k loan. Those loans are not easy to do and lots of lender don't like to do them.
I can give you more details in person if you call me, its' too much to talk about the process over email
Please call me
Thanks for inquiring
Grace Siefer
Coldwell Banker Heritage Realtors
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Steve Quinta…, Agent, Albuquerque, NM
Tue Jul 31, 2012
The answer to your question is "It depends". The general rule is that every property must be scrutinized for suitability. Foreclosure properties must be looked at the same as any property. Foreclosure properties come in every kind of condition and are marketed in a variety of ways. You can learn how to work with foreclosures or you can hire a broker who is competent to represent you.
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My NC Homes…, Agent, Chapel Hill, NC
Tue Jul 31, 2012
It'ss not much more difficult than buying a traditional sale, however before you start considering foreclosures, I hope you'll read the article I've attached below. With more than 30 years of expereince in dealing with foreclosures, I can say with authority that rarely (and I do mean rarely) are they the deal buyers think they are.

You'll absolutely need to find an experieneced buyer broker familiar with foreclosures and who hopefully also has expereince in or resources the can reccomend who can help you accurately estimate how much it's really going to take to repair/imporve the home. There is considerably more risk involved in buying a foreclosure and unless there's a siginificant upside, then it's hardly worth the risk.

Good Luck!
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James Gordon…, Agent, Hamilton, OH
Tue Jul 31, 2012
In my experience it is not that hard to purchase a forclosed home. Forclosedhomes that are available for sale will normally be listed on the local MLS as lenders have found that the hortest time to sell and the highest price can be achieved by exposing the property to the greatest number of buyers.
Just be prepared some lender owned properties have had a lite rehab and are ready to move into. Some lender owned properties are in bad condition and need a lot of work done to them. The current situation in my area is not how cheap can we get the property but how much over list should we offer. If the property is priced right it will have multiple offers the first week. The last 3 preapproved hort sales that I have ilsted have had multiple offers on them and the last one had 2 offers before I could get all the paperwork to the lender.
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Teresa Luther, Agent, Dayton, OH
Tue Jul 31, 2012
Hi Jessica. Foreclosures are generally less expensive than homeowner owned sales, but many times the buyer must be prepared for expenses related to repairs or some elbow grease.
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