Everyone knows that you can save money by buying a bank foreclosure. The prices of these homes are usually WAY below the price that the home originally sold for. So it must be a “no brainer” to buy a foreclosure rather than a home being sold by the occupant, right? Uh…not exactly. If only it were that simple.
The basic truth is that foreclosures are not for everyone. Yes, you can get some great buys. But they are not for the weak of heart. And they are not for someone who has no extra cash on hand to cover the surprises that often come with them.
First of all, you usually buy them with what is called a Dry Inspection. That means that the utilities are all turned off. The bank has winterized the property and shut off the electric, water, and gas. So your inspection will leave you with lots of unknowns. You can sometimes pay to have the utilities turned back on, de-winterize the house, and re-winterize, but that can be a huge expense. So most buyers of foreclosures buy them with their fingers crossed. They hope there are no major issues. If there are problems, that can greatly increase the final cost of the home.
Also, banks are much more reluctant to loan money on a foreclosure for an owner/occupant. They don’t like loaning money on homes that are not move-in ready. Unless it’s a very good buy and you have the cash to get it ready to move into, don’t blame your banker for being conservative.
Last (but definitely not least), be prepared for headaches prior to closing. If the seller is a smaller, local bank, things should go fairly smoothly. But if you’re dealing with one of those big national megabanks, be prepared for a long, frustrating experience.
Bottom line: Are foreclosures worth the hassle and the risk? Yes, they can be. We just want to make sure you know what you are getting into before you dive in.
Call any of the professionals at Poplar Bluff Realty. We’d love to discuss foreclosures with you, watch for them to come along for you, and assist you through the process of buying one!
Once again, my name is Ben Craig with Poplar Bluff Realty. Where our mission is to bring families home.