Foreclosures are saturating the real estate market. While many people avoid them, there are some great deals to be gained for buyers. However, buying a foreclosure should be considered with caution and efforts taken to avoid some of the more common pitfalls.
The most important aspect for buyers of a foreclosed property to remember is that they are no longer dealing with a traditional seller, but instead they are dealing with the bank. This means that negotiations will be much tougher and could take a significant period of time. Putting in an offer on a foreclosed property often requires much patience and flexibility. In other words, don’t expect to get your way or even have much power in negotiations. Remember that the bank is taking a huge loss on the home and wants to get as much as possible to minimize profit loss. Your offer needs to be as clean and strong as possible, which means you should offer your top dollar and avoid asking for help with closing costs.
Another important thing to remember when attempting to purchase a foreclosure is that they are typically bought in “as is” condition. This means that the bank will not disclose and knowledge of the prior owner’s experience, leaving you without vital information about the home’s history. This makes it extremely important that you obtain a home inspection. However, if you do find that there are significant damages to the home, do not expect the bank to make corrections of the problem or even offer financial concessions to cover the cost. Often times the bank will only accept offers that acknowledge their own liability over repairing the home.