Lenders that have taken a property back after going through the foreclosure process are often eager to unload these properties and are willing to take a significant loss to do so. It’s important to know that buying a foreclosure home works a bit differently than buying a home through a traditional listing.
The following are some things that home shoppers should consider before making an offer on a foreclosure property.
1- Buying “As-Is”
Distressed homeowners that are about to be foreclosed on are sometimes disgruntled with the bank and feel like they want revenge against the bank. They may even strip the home of anything of value like the central AC unit, appliances, fixtures, etc. In my experience as a realtor in Orlando, I’ve seen foreclosure properties that have been vandalized to the point where the homeowner has destroyed windows, walls and even filled the toilets with cement!
However, if the price is right, don’t let these things discourage you. Anything can be fixed or replaced. Before making your offer, find out how much a contractor would charge to make the necessary repairs.
2- Know What You’re Up Against
When you buy a home from a homeowner through a traditional listing, you’ll probably get some helpful advice about the home like a loose door handle or leaky faucet that needs replacing. However, with a foreclosure property the homeowners won’t be around to give you any advice or history about the home. The lender that now owns the property won’t be able to provide you with this type of information because they’re not familiar with the home.
That’s why it’s so important to have a thorough inspection done on the home or you could end up with a money pit on your hands.
3- Don’t Low Ball The Bank
While it is true that you can get a heck of a deal buying a foreclosure property, don’t think that the lender will accept any offer that you submit to them. As opposed to individual homeowners, lenders can afford to keep the property until they feel that the price is right to sell it. The best practice is to get an estimate for all the necessary repairs and make your offer based on other comparable properties minus the cost of repairs. This number should get you into the ball park.
If you choose to send in a low ball offer to the bank, they may not even consider your offer and you could end up losing the deal.
4- Be Patient
Buying an REO property usually takes a lot more time than buying a home the traditional way from a homeowner. These lenders have thousands of foreclosure homes to deal with which means it takes quite a bit longer to get around to looking at your offer and deciding whether to accept it or not. If you want to be in the foreclosure buying market, patience is not a virtue, it’s a necessity.
Lenders have procedures and systems set up specifically for selling foreclosure properties in Orlando. This can make inexperienced home shoppers feel like a fish out of water. That’s why it’s crucial to enlist the help of an experienced Orlando Realtor to help you on your quest to buy a foreclosure at a great price. If you rely on the listing agent that was hired by the bank to help you with everything, you may be setting yourself up for disappointment.
The agent that was hired by the lender is probably dealing with dozens of foreclosure properties at the same time which means that you won’t get the attention that you deserve. By working with a top Orlando Realtor, you can have the confidence of knowing that you’re in good hands and you won’t have to worry about having to contact the listing agent about anything.
Your Orlando realtor will also be able to provide you with a list of recommended home inspectors and contractors in the area so you don’t have to spend your time researching them yourself.