REO or real estate owned foreclosed homes can offer great deals but watch out for downsides that may occur with any foreclosure, like maintenance or permitting issues.
Purchasing a Foreclosed Home from the Bank – Bad Idea?
Question: We are considering a home in a great neighborhood however are nervous since the house was foreclosed by the bank, who is now selling it. Is this a bad idea?
Foreclosed homes sold by lender’s “REO” or real estate owned department can be purchased at a favorable price, but there may be some downsides.
The same can be said for foreclosed homes bought by real estate investors on the courthouse steps.
If you take these potential issues into consideration, you could find yourself paying an excellent price for your new digs.
REO purchase contracts are very one-sided, so you’ll want to review the terms carefully. It would help if you also considered that your seller never lived in the home and may not have even visited it in person.
Combine this with the fact that the majority of people do not spend much time and money caring for a house they are about to lose to foreclosure and that it could have been empty for an extended period, and you must be extra diligent.
It is essential that you thoroughly inspect the condition of the home both with a general inspector and follow up with specialists for any concerns noted in the report.
It’s also advisable to have a land survey done and check with the municipality to ensure that there are no code violations or permitting issues.
Speak with the neighbors to see if they are aware about any issues with the property.
If the seller made repairs, you’ll want to carefully check them to ensure that they are not just hiding more extensive issues.
If you notice anything that does not make sense to you, whether in the contract, with the city, or the condition of the home, get an experienced professional investigate it to make sure that what you are buying suits your needs.
Ready to find your new home here in the Tampa Bay and Surrounding Areas? Nick, Cindy & Nicholas Davis with RE/MAX Premier Group are here to assist you with all your Real Estate Needs. We are always available at 813-300-7116 to answer your questions or you can simply click here and we will be in touch with you shortly.
Need to get started with your mortgage process? You can contact Kyle Edwards with Iberia Bank at 813-495-5131, or simply click here to start your online application.
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(all data current as of 11/24/2020)
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