By now we all know that foreclosures have had a big impact on the housing market, and many Metro Atlanta markets still have plenty of them for sale. These homes can be a great opportunity to buy at a bargain price. However, many buyers are a bit leery of foreclosures, and rightly so. Hidden defects are among the biggest concerns, but buying foreclosures doesn’t have to be a scary process if you take the right precautions.
Always get an inspection before you buy. You should do this in any real estate transaction, but when it comes to buying foreclosures, it is even more important. Keep in mind that the prior homeowner was in financial distress of some sort probably long before the bank took the property back. What that means in many cases is that common maintenance issues were neglected due to lack of funds. It is also likely that the home has been sitting vacant for a long period of time. Homes that sit vacant generally do not have utilities turned on and there are a host of other issues that can occur due to improper temperature regulation. Things like mold or warping of wood floors are not uncommon. Air conditioning units are a common target of thieves, and you’ll want to be sure to check that the units are still in place prior to closing.
The offer and acceptance process differs when dealing with banks then it does if you are dealing with a traditional seller or builder. Oftentimes, you will find that you are in a multiple offer situation and are competing with other buyers who are also interested in purchasing the property. You may be asked to submit your highest and best offer, and you will definitely be asked to provide either a pre-approval letter or proof of funds if you intend to pay cash. Banks can take a week or more to respond to offers, and they will also require you to sign special addendums to the sales contract. When buying a foreclosure, it is not uncommon to find that you have less ability to negotiate on certain key terms. They will sometimes require that you apply for financing with their preferred lender, limit the amount of closing costs they will pay on your behalf, or require you to use their attorney to close. Of course every bank or institution has their own unique set of requirements, so these issues will vary.
The bottom line in dealing with foreclosed properties is that they can be a great deal for the right buyer. Just be prepared to make some repairs or improvements to the property, and understand that the process will require some flexibility and patience. Terri & Company Realtors® agents are experts at dealing with foreclosed properties and can help navigate you through this at times challenging process. Contact us today for a list of foreclosed properties in your area.
