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If you're thinking about buying a foreclosure home, here are five friendly tips to keep in mind:
1. Realize that it can be quite difficult to gain access to these properties before they hit the market.
A lot of folks believe there's a secret way to get a foreclosure before it's available to the public, however, most of these aren't handled by small or local banks. Instead, they're managed by bigger banks with extensive assets all over the country. As you can imagine, these organizations are part of the financial sector, not the real estate sector, so they usually hand over the entire foreclosure process to a management company. These management companies often hire a local realtor to assess the property's value for them before they list it. This works in their favor as they can have a local expert look out for their interests and ensure they get the best price possible. That's why you generally find out about these properties at the same time as everyone else. If a local bank is foreclosing on the property, there's a chance you could approach them and ask about who is handling their REOs, but this tends to be more of a rare occurrence than a standard practice.
2. Make sure you're getting a fair price
Foreclosures aren't always the bargain they're made out to be. The majority of foreclosures are listed on the open market, meaning they're just as visible and in demand as any other property. They're often priced at their highest potential because that's what the bank and the listing agent are striving for. They're not simply giving these properties away.
3. Do a detailed inspection of the property with the utilities turned on
If you're considering a foreclosure, it's essential to check that the home has been properly winterized and that the heating system works if necessary. Sometimes, you might need special permission to turn on the utilities, which could take a bit of time and money.
4. It's advisable to be ready for any unexpected issues when planning to purchase a property in its current condition.
If feasible, consider having a friendly contractor take a look at the house and give you a rough idea of how much any renovations might cost. Also, remember to activate the utilities; you wouldn't want to stumble upon any unexpected issues like broken water pipes or a furnace in need of replacement.
5. Have appropriate anticipations concerning the closing date.
It's always good to keep a positive but realistic outlook when it comes to setting a closing date. For instance, foreclosures can occasionally come with title issues that require some extra attention.
If you are thinking about purchasing a foreclosure house, give our office a call (717) 779-9833 so we can help you through the process!
