There are many people who watch the real estate market with an avid interest in foreclosed properties. Foreclosures tend to market for less than their value because the bank that owns the property is more concerned about covering what is still owed on the property, as opposed to making money it.
It Can Be A Good Deal
It’s true, sometime you can get a great deal on a foreclosure, but banks are not the same as dealing with your typical seller. Banks can take up to two days to get back to you on an offer, and you don’t get the benefit of having conditions like you would with a regular seller. Foreclosures are sold “as is, where is” which means no one is coming to fix any plumbing or replace any screen doors before you move in, unless you are the one paying them to.
Foreclosures are frequently in a terrible state of repair. Evicted owners may purposefully damage the inside of the home, which could be some holes in the drywall, soiled flooring, or even broken windows. This isn’t true of all foreclosure homes though. You may get lucky and be able to view ones that were taken care of and loved. This is the best case scenario. If you do go with a home that needs a lot of work and repair, remember that the condition of the home isn’t much of a bargaining chip for negotiations with the bank – they don’t particularly care all that much, they just want their money.
If you are an investor who is buying up foreclosures and flipping them, then this information may not be surprising to you at all. If you are thinking of becoming a home flipper, and want to focus on foreclosures as a way to snag the best deal, be sure to read all the fine print.