Feb 03 2009
Foreclosure – What to Expect When Touring One?
There are many foreclosures out there today on MLS. It is a sign of the times. Many people are loosing their homes and many banks are having to sell those homes at reduced costs. It’s great if you are in the market for a house. You can get a really good deal if you can find one that is to your liking and fits all your needs. Of course there is a great debate on whether or not this is the right time to buy but that’s for a different day to discuss. With so many foreclosed homes on the market, you really have to prepare yourself before you go inside of one. They may not all be in the kind of condition you are used to looking at when it’s a typical home sale.
Foreclosed homes or bank owned homes (REO) tend to lean more on the fixer upper category instead of turn key or move in ready. Many of them may be missing certain things that you feel should be included with the house such as light fixtures, appliances, doors…yes some of them even have doors missing. The key that you need to remember when looking at a foreclosed house is that they are typically all sold AS-IS. That may scare many people but that shouldn’t make you walk away before you even look at the house. Even though they say AS-IS, many banks may be willing to negotiate on certain things especially if they are required to make the house livable or if they are small enough requests that it wouldn’t affect them too much to do. Termite work is always a good idea to have done regardless of the AS-IS designation. If an item is called as missing on the appraisal report, there is a good chance you can ask and probably will get those items. The other item to remember is that once you are in escrow, that doesn’t mean you can’t ask them to do something even though they said AS-IS. It never hurts to ask.
Many homes that are foreclosed on these days are homes that have just been neglected. There are some that are foreclosed because the previous owners took money out for remodeling or repairs and never got around to finishing those repairs. Some of those homes may need special loans if they are not livable. What you should be looking for are the bones of the house when looking at a foreclosed home. Don’t look at the cosmetics or the lack of staging. Many are empty and have been empty for a while. If you look beyond the finishes and the dust, ask yourself if the house has a good lay out. Does it have a sound structure? Can you take the cosmetic stuff away and have a nice looking house? Because so many of the homes are being sold at reasonable prices, it wouldn’t hurt to look at a few foreclosed homes and add the cost of fixing it up to your standards and seeing if it fits within your budget. You might be able to find a home that you can make your own just by looking beyond the paint and dust.
