Buying A Foreclosed Home Not Always A Great Deal

In this market their are a lot of people out there saying that foreclosed homes are the way to buy homes. You can get them for below market value and they are good, if not great deals. but are they really?

A few things most people do not realize when they buy a foreclosed home versus a home for sale by a seller. The foreclosed home is sold "as is" condition. That means what you see is what you get. the bank is NOT going to do any repairs to the home. The home is not going to be cleaned prior to you buying it. The utilities are not on and if (and you always should) have an inspection and there are issues with the house you are never going to get the bank to repair them.

Another thing on most foreclosed homes is the flooring is either stained beyond repair, damaged or missing. The people living there prior to you really do not care if the stains are going to come out. They do not care if the carpet has rips in it or the hardwood floors got scratched when they were moving their items out of the house.

Then you have to look at any other miscellaneous repairs the home will need. A kitchen cabinet door may need replacing, leaky toilet, electrical issue, furnacne or water heater issues are all items that you CANNOT negotiate with the bank once you and they agree on a price. But, these are all things that can come up in a home inspection.

Now, not to sound to gloomy. You do have a ten day window to have an insopection done on a foreclosed home to evaluate the issues with the house. Once that evaluation is done you either move forward or back out of the agreement.

But, just because you bought the house for 10% to 30% less than a home that was for sale that was not a foreclosure does not mean you got a great deal. Factor in the repairs and maintenace you need to do to bring the house up to the standards of the other home and see what savings you then have.

I have sold my share fo foreclosed homes where the deal was good. Even after factoring in the reparis to the house and the repalcement of items that were damaged ro stained it still came out to be a better deal than the one doen the street that was being sold by a seller through non foreclosure means. But, do not assume every bank owned home is going to be a great deal or you will be greatly disappointed.

Dave diCecco
Realtor/Broker
www.davedicecco.com