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Alicia, Home Buyer in Houston, TX

Buying a forclosure

Asked by Alicia, Houston, TX Thu Sep 6, 2007

Looking at florclosure homes, I would like to know if the home needs repairs, what are the possibilities of getting a lower selling price from the bank?? Or, can I request that the repairs be done at the asking price?? I realize that the longer the home is vacant, the better of either of these, am I thinking correctly??

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The only addition I can give to this discussion is for you to somehow get into this home & bring an inspector with you. Don't dilly-dally with unanswered questions. As-is is just what is says.... so take all the precautions; and do not under any circumstances gamble.

You will be well rewarded if you do some homework first. Know your budget; both pre & post sale. In the absence of an inspection - expect the worst & plan accordingly: plumbing, roof, electrical, etc.

Good luck to you... I am excited & hope you enjoy the process. One last thing - please get the assistance of a professional - don't go it alone!
3 votes Thank Flag Link Thu Sep 6, 2007
I second Carrie.

One more thing - Be very careful of what Carrie said about 'AS IS', and that meant 'AS IS' in bank owned (REO) property.

REO properties not only are AS IS, they also don't come with disclosures. Since banks do not live in those properties and they usually assume the property or get the property at auctions, they do not have knowledge about the condition and what happened to the proprety and they are legally not reuqired to discolose anything.

They usually just want to get rid of the propery so they will not repair the property. So, negotiate the price if you can

Sylvia
2 votes Thank Flag Link Thu Sep 6, 2007
Sylvia Barry,…, Real Estate Pro in Marin, CA
MVP'08
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Alicia,
As a general rule, bank owned properties come as is. This means they will do no repairs. Your best bet is to try to get the price right for you. It really depends on how much the bank has vested in the property. They will be hard pressed to take a lower price that what is owed. If the property is represented by an agent or other entity contact them and try to negotiate the price you want. Depending on the status of the foreclosure, it could go to sheriff sale. If they bank does not get what they want at sheriff sale they will take it into inventory. Do you know what stage the home is in?
Web Reference: http://carriecrowell.com
2 votes Thank Flag Link Thu Sep 6, 2007
Another idea....get a home inspector to go through the home with you. If the inspector does not need to write up a formal report for you, it should cost arund $200....a small investment in the grand scheme of things.
Web Reference: http://www.cindihagley.com
1 vote Thank Flag Link Thu Sep 6, 2007
The Hagley G…, Real Estate Pro in Pleasanton, CA
MVP'08
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Bank owned properties are sold As-is, so I wouldn't count on repairs being done. To be sure, ask your buyer's agent (if you have one) or call the listing agent and ask if the house is being sold AS-IS and then you'll know for sure.

As for the list price, it's usually negotiable. The banks flexibility is dependant on many factors such as other offers, time on market, market conditions and whether or not this particular lender likes to own real estate. Believe it or not, there are some institutions that hang onto these properties until the bitter end and others that seem to have no interest in owning a piece of real estate; they'd sooner have a write off then deal with repairs or code violations, etc.

Bottom line...the suggested list price of a bank-owned property typically takes into consideration what repairs are needed, but you should only offer what you're comfortable spending.
1 vote Thank Flag Link Thu Sep 6, 2007
Always do an inspection to determine repairs. The problem with foreclosures is that often utilities are off so it is tough to do inspections. Bank won't let you turn them on. They don't likely know if there are problems and disclose that that house is sold as is. So you need to factor that in when making the bid. They often won't do repairs. You can always request or bid anything you want, but they don't have to accept. You can often get a price lower than asking price from bank foreclosures. How much less is always a good question.
Web Reference: http://www.teamlynn.com
0 votes Thank Flag Link Fri Sep 7, 2007
Bruce Lynn, Real Estate Pro in Coppell, TX
MVP'08
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Most bank owned properties are purchase in their present condition without repairs and or warranties. It is a good idea to get a presale inspecition so you know what you are purchasing. You can factor that into the offering price when making the offer.
Web Reference: http://pamwinterbauer.com
0 votes Thank Flag Link Thu Sep 6, 2007
Pam Winterba…, Real Estate Pro in Danville, VA
MVP'08
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