Everyone is after the "steal". If you are not an investor, you are up against some extremely stiff competition. We"Regular folks" live in a different world of home buying. The world of investor buying is usually CASH, and NO contingencies.
What does that mean, well.... most of us have to get a loan to purchase a home. We want contingencies in the contract to protect us, like an inspection contingency, insurance, property disclosure from the sellers... to mention a few.
Foreclosures for the most part are sold "as is, where is". The bank does not like contingencies. An investor sees a foreclosure they think has some possibility, they go to it, have their contractor "inspect" it for them with an idea of how much it is going to cost to get the property up to livable standards, have a price in mind as to what income the property can produce, how much they can resell it for, and if it meets their goals, BOOM, cash offer, no contingencies, quick close.... i.e. bank, very happy.
Here we come, as normal people and make an offer with all our contingencies because protection is the name of the game. Our offer might be more money, but the bank is letting us look over the property and back out if we don't like it...they are letting us go through a lender which will require an appraiser to come out and possibly find other faults, etc. and POOF, our offer is gone with the wind and the bank is sitting on the property longer... Even if a cash offer from an investor is less, which one do you think the bank will consider more heavily?
Just some thoughts.... that, and often, you will need to have a HUGE tolerance for repair. Still, there are some that can be fixed up and not break you. There is a psychology that often goes hand in hand with foreclosure... "the bank is taking MY home from me". Well... it was the bank's home technically and the owner could not pay the bank (for whatever reason sad or bad). Then... the former owners decide that if they don't own it, they will remove some things that they feel they DO own, ceiling fans, dishwashers, even the occasional central air conditioning unit. The foreclosure process takes some time to complete for the bank. In that time, the house sits. And sits. And sits. All closed up... becoming staler and staler with every passing day. Then when we come in to tour them, there is a "stale house funk" that can hit you.
The problem to me is that there is so much of a foreclosure market in "headline grabbing" areas, that many people feel it is everywhere in the country. Certainly, there are more here than in the past,(and foreclosures will remain a portion of the market, but our Hot Springs real estate market is not Detroit, or Vegas or Lake Poinsiana, Florida. Folks are looking for the steal... and when you find a foreclosure that is in really good shape, keep in mind it is a different animal that doesn't exactly go by "the rules", so please don't expect them to be in pristine condition, or expect home owners (sellers) to drop their home price to a foreclosure level.
If you want to look for foreclosures, it is best to contact me. Often, the foreclosure search feed does not populate correctly on my website. I know several agents in town that specialize in foreclosed properties, so I can search their listings and send you the information.
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