Some HARD FACTS about foreclosures…
Everyone wants a deal. With the abundance of foreclosures and distressed properties out there – the opportunities do exist. The price you pay for that home is less than a ‘regular’ sale in dollars, but much higher in emotional capital. Which, I would say, is worth much more than a dollar.
Here are a few truths about foreclosures:
- Just because it is a foreclosure does NOT mean that it is a deal. Banks do not always price property appropriately. Sometimes they are at – or even above – market value. Check with your agent and make sure you do your homework on value before making an offer.
- The closing date is a guideline, do NOT plan your move around it. Title issues are extremely common. Slow approvals, mistakes when foreclosing, sheer volume – these all contribute to a property not being able to close on time that would not be factors in a traditional transaction. Save yourself the headache and build in an extra week, or three.
- The property will NOT be in move in condition. Common problems include – missing appliances, leaky pipes, intentional damage, deferred maintenance, bugs, trash, broken windows and more. While the visible almost always includes “carpet and paint” – it is what you can’t see that might surprise you. Plan for a few extra home improvement projects and take a class or two at Home Depot before settlement. The skills may just come in handy.
- The bank does NOT care if you withdraw – They really don’t. There are likely 15 contracts after yours waiting for the same deal. Threatening to walk doesn’t generally work. It will almost always frustrate those involved as they question how much you want this property that they are working 24/7 on to close for you. Remember the feeling when you wrote your offer – you liked the house and wanted it at that price because it worked for you. It still is all that – don’t let any delays cloud that. When the stress builds up – take a yoga class, crack open a bottle of wine, write in a journal – and breathe. Eye on the prize.
- Experience counts. Make sure you are working with a Realtor that is a Certified Distressed Property Expert (CDPE). You will need all of their experience to guide you through the sometimes choppy waters of a foreclosure to your safe harbor.