My finance guy tells me that I should be looking at getting a foreclosure, but my real estate agent keeps saying that there are too many horror stories and he rather I not buy one.
What do you think?
2007-12-09 16:26:03 · 8 answers · asked by Okay Hero 2 in Business & Finance ➔ Renting & Real Estate
It depends. Foreclosures are generally risky, and are best left to those with deep pockets. Sometimes it works out great and sometimes you get burned. Are you rich enough to take the financial hit if the one property you get is a bad one? Ask your finance guy if he would recommend that you put all of your money into one stock, because it could be a good deal... things could end badly.
And I don't just mean that it's in bad condition. Depending on how you buy the property (auction, bank, market) you could wind up paying tens of thousands more than you expected just to close on the property.
I'm a Realtor. I buy foreclosures. Sometimes I flip them for below market prices. Sometimes I rehab them completely. I make money in this way because I absorb some of the risk of speculating on condition of the house, and because I'm familiar with the process. It's less risk to the buyer, and they still get a good deal. You may try to find one of these. There will be some in your Realtors database, though they may not be marked as being foreclosures.
Sometimes I see newbies at the auctions. They want to "invest" in foreclosures. It's funny, because they always overpay for properties - bye bye bank account - and I know they won't be back.
Just be careful.
2007-12-09 17:03:17 · answer #1 · answered by tax_man_cometh 2 · 0⤊ 0⤋
The horror stories usually involve damage to the property caused by the homeowners after the foreclosure but before eviction. You may find that the furnace is gone, sinks are not working, copper pipes have been stripped, etc.
And the longer a foreclosure sits on the market, the further it falls into disrepair. The lender will do nothing to make sure it is being kept in good condition, and the roof may start leaking, or the property freezes in the winter and causes further damage.
But, if you can get a good deal, and are willing to put in the extra investment to fix problems, foreclosures can be a good idea. Just make sure you inspect the property, have a professional home inspection done, and pay a fair price.
2007-12-10 03:08:22 · answer #2 · answered by Anonymous · 1⤊ 0⤋
Sometimes when deals seem to be too good to be true....they might just be that.
I recently put an offer in for a bank-owned foreclosure that *appeared* to be in decent shape considering it was a foreclosure. To make a long story short, it fell out of escrow because I found out that there was mold after the bank accepted my offer.
What ticks me off about the whole transaction is that I feel that the broker selling the place knew about the mold and attempted to hide it by repainting the place. Once the bank accepted my offer, they sent over a five page mold disclosure basically saying that they where unaware of any mold bc they were not mold experts and that no one (not the bank, the agent, broker, and any one else involved in the selling of the house) could be sued in the furture if mold was discovered. I can't speak for all brokers who specialize in forclosure, but this one was blantant liar who had no problems being deceptive in order to make a sale.
So if I had one advice to you, it would be if you do decide to purchase a foreclosure, spend the $200 to get a home inspector to come in. You don't want what appears to be a good deal, to come back and bite you in the end. I'm glad I did.
2007-12-09 16:42:54 · answer #3 · answered by Tizzo 2 · 2⤊ 0⤋
Foreclosures CAN be a good way to save $$$- but Research them CAREFULLY- & find out every scrap of Info. you CAN on each of the Properties- so you DON'T end up with a "money pit..."! :( (By the way, your Realtor makes a bigger Commision selling you a New Home & it's LESS work for Him... -so of COURSE he's not going to be pushing Foreclosures very hard... ;). Do your Homework- there are some GOOD deals out there these days... :)
2007-12-09 16:41:28 · answer #4 · answered by Joseph, II 7 · 2⤊ 0⤋
Your Realtor says that because there is not much commission in it for him. DUMP HIM!
Foreclosures are rampant these days, there are deals to be had. You need a good inspector to make sure there are no major structural problems, and a good attorney to help with the paperwork. You do not need this Realtor. Find a better one or go it alone.
Good luck!
2007-12-09 16:32:04 · answer #5 · answered by gingerdaisy43 3 · 1⤊ 0⤋
Sorry to tell you this but it sounds to me that your Realtor is A) lazy, B) Wants a bigger percentage, C) Or any foreclosure worth buying, him and his friends are going to want to snatch them up.
I find It odd that your Realtor said that. A Vast majority of foreclosed homes have been bought by Realtors.
2007-12-09 16:33:37 · answer #6 · answered by Anonymous · 2⤊ 0⤋
In most cases, foreclosures are going to require som erehab work. (people generally trash the house on the way out). Their are great deals to be had without having to go through all of the rehab work.
2007-12-09 16:30:42 · answer #7 · answered by Paul C 3 · 0⤊ 1⤋
If you can buy a foreclosure at half price then do it . If you don't have the money don't even try.
2007-12-09 18:28:49 · answer #8 · answered by Anonymous · 1⤊ 0⤋