Are Foreclosures Really a Bargain?

Often home buyers call and ask for a list of bank foreclosed properties.  But are they really a deal?  In the last 5
years I've shown a ton of bank owned properties.  Some in good condition and some in not-so-good condition.  Here's what I have surmised about bank owned properties:

1. A foreclosed property must be weighed the same as a standard listed property.  Each property is different and unique.  In most cases you are buying the property directly from the bank with its unknown defects. Which I why I advise more scrutiny in a home inspection on a bank owned property than any other property.

2. If you are planning to live in the property as your primary home, you will need to have vision when viewing a foreclosure.  A foreclosed property, most times needs work or repair and many times has suffered some damage.  Damage from improper upkeep or damage from the prior owner or acts of nature or vandalism to

the home when the home was vacant.  The home may need new carpet and paint and smell horribly of pet odor from the house being closed up.  I have been in properties that were so bad we could not even go in and signs were posted on the door to wear a mask upon entry due to mold, odor, etc.

3.  There are bargains in foreclosures but check the sales in the immediate neighborhood.  There may be homes listed for the same price in better condition!  Just because the bank needs to get a certain price for a property, does not mean a buyer has to pay it.  Banks sometimes are not realistic in setting their price just as a normal home seller is not.

4.  Get a home inspection!  I cannot stress this fact enough on buying a foreclosure.  Every defect will be revealed in a home inspection so that you can better decide if you want to proceed in the contract with the
bank.  My last foreclosure buyer obtained an inspection and it was found that the air conditioning system was non-functional.  We had already determined that it was but the inspector needed to document it.  We were able to go back to the bank and re-negotiate the transaction and the bank installed a complete new AC system inside and out.  Not normal when purchasing a foreclosure as the buyer is purchasing "AS IS".  Many items in the home inspection may be minor or cosmetic but the items can total up to a large bill when you put it all together.

Questions to ask yourself when buying a foreclosure:
When you total all the repairs, do they add too much cost to the house?  Will you  keep within your budget with the added repairs?  Will you have the time to do the repairs yourself or the money to hire someone?  Will your lender allow the home to be purchased in the present condition?  What other modifications will you want to make in the future to the house?  New kitchen, new bathroom?  Upgraded flooring?  Will it need big ticket items such as a new roof or AC system within the first five years?  Will you be able to break even or make a profit off this home within the first two-five years?

In summary, a foreclosure needs to be viewed the same way any other house is viewed but proceed with more caution.  There are still many great deals in Florida in the foreclosure market.  Buy smart!  It is the largest investment you will make.  If you think you might be interested in purchasing a foreclosure, call me.  JoAnn Young, of Young & Young Properties.  321-243-4917  Local in Brevard County, Florida.