Pinetop White Mountain Blog

Good Afternoon Everyone!

I wanted to address something that I have been thinking about for awhile.  It is the questions of whether those Foreclosure Properties are really the best properties for the Buyer and is purchasing one of them in the best interest of the Buyer?

Let us stop to consider for a minute what a Foreclosure Property really is.  It is a property that someone bought, couldn't afford, and the Bank took it back from them.  Now the Bank Owns that property.  Do you really think that Bank is going to work in the best interest of the Buyer when a buyer comes along?  The answer is simply NO.  That bank is going to negate every single protection you have in the Purchase Contract and everything will be for the benefit of the Seller.  They probably won't even guarantee you good strong clean title to the property at closing. 

Think about that one, what does that mean?  It means that somewhere out there could be another party who has a claim against the ownership of the property.  There could be an old lien of some kind and that Bank isn't going to guarantee against it.  That old claim could resurface someday and you will have to go to court to clear up the problem.  That is pretty scary all by itself.

Now lets look at some other aspects of this purchase.  Your Agent or Attorney is going to spend a lot of time with you writing your offer to purchase that property.  Every State has different contracts but they are written by the Department of Real Estate and Real Estate Attorneys with you in mind.  They will include certain protections for you and for the seller.  They do everything they can to help you over the humps and bumps and do so without unnecessary expenditures by either party.  Your agent will work very hard to be sure that your interests are looked after in the transaction.  With a bank owned property, all those protections will just go away.

When you submit that offer to the Bank or Asset Management Company they are going to send you a Counter Offer of some sort that will basically take out every protection you have in the original offer and make everything to their benefit.  You may even have to invest money of your own to purchase that property before they will even accept your offer.  That means you are putting out your money to do work or conduct inspections on a property that the Bank hasn't even agreed to sell to you.   Are you willing to risk your hard earned money on someone else's property?

Next you will have to do your own inspections at your expense to determine what needs to be done to that property to either make it habitable (many aren't because their former owners trashed them before they moved out) or to be able to qualify for a loan.  If you are going FHA there will undoubtedly need to be work done before you can get your loan.  The Bank isn't going to pay for that, you are.  If you don't have the cash to do it, the cost of those repairs will be added on to the purchase price of the home.  What happens then if for some reason your loan doesn't go through?  Who do you think that seller is going to go after for the cost of those repairs?  Again, are you willing to spend your money to repair someone else's property? 

Are you getting the picture yet?  The bottom line here is that although on the surface Bank Owned properties look like a good deal.  Before you enter in to an agreement to buy one of them you really need to take everything into consideration before you do so.  The money you are saving on that purchase price just might not be worth it. 

Having a good house where the seller has taken pride in their property and are willing to help with any repairs needed is probably worth those extra few thousand dollars.  In the end you will have a home you love that doesn't need a complete remodel before you can move in to it, and you'll have a good strong clear Title to the property. 

Think about it very carefully before you enter in to such an agreement.  Your Agent in this case is no more than a facilitator and can do nothing to protect your interests because the Bank takes all your protections away from you.  They don't care about you or the property, all they are looking at is their bottom line.

Give us a call if we can help you find the right property.  It might be a bank owned property but perhaps a bank owned isn't in your best interest.  Let us help you make that decision. 

---REMEMBER---

"WE WORK FOR YOU!"

SANDRA & BRUCE PAULOW, GRI'S

YOUR HIGH COUNTRY REALTORS®