Foreclosures Need A Lot Of Work. This can be true, but more often than not homes are only in need of cosmetic repair. There are of course, nightmare Tampa real estate stories where the whole house needs to be renovated, the electricity is inoperable, or the plumbing does not work properly. In such cases, the home can become a money pit. In most cases however, the house may need paint, flooring, or appliances, which are items that a lot of new homeowners would possibly change anyway.
Foreclosures Are BARGIN CHEAP. Foreclosures are generally cheaper than standard sales, but they are not quite the savings that most Tampa real estate discount hunters are looking for. Typically bank owned properties require appraisals. Also, banks will have Realtors give a an opinion of value equivalent to a quick sale in the market. The price may be significantly cheaper than what the original owner paid, but not too drastic from what the current market is. Be realistic with the prices; they may be at maximum 15-25% off the market price, not 50%.
Foreclosures Are RISKY. Buying a foreclosure at an auction on the court house steps can be very risky. The chance that the home carries liens and other loans do exist. Though, typically buyers are looking for bank-owned foreclosures which are treated more like regular home sales. Plus, the owner is the bank which means it will most likely result in a cleaner transaction.
Foreclosures Do Not Allow Inspections. Again, when you purchase a foreclosure from the court then there is a very small chance for an inspection of the home. When you purchase from the bank, they will allow inspections which enables you to determine prior to closing any major issues the property may have. Though in almost all cases the home will be sold “as-is”, meaning the bank will not complete and/or pay for repairs prior to closing, the inspection process allows you to add repair costs into the price of the home to get a clearer picture of actual cost.
Make Low-Ball Offers. The banks are NOT that desperate to give the homes away. In fact, more often than not, the homes sell for more than the list price. A foreclosure listing is handled just like regular a Tampa real estate sale, meaning the bank will consider lowering the price after a few weeks if they feel that the price is too high for the market.
You Have To Buy Foreclosures With CASH. This would most likely be the case with a property being sold at a courthouse auction, but not with a bank owned foreclosure. The property is treated like a regular sale, and conventional loans can be obtained. Only if the foreclosure is in really bad physical shape is it possible that it may only be purchased with cash. The reason for such a situation would be that the property does not meet the standards for loan.
It’s Easier To Buy The Foreclosure With The Bank That Owns It. If you have difficulty getting a loan from other banks because of poor credit and you think working with the existing bank is a viable option, that’s just not the case. The bank just had a bad loan and had to foreclose, and they are hardly likely to provide a low credit buyer with another risky loan. The bank would be happy to provide a new loan to a buyer, but only if they qualified like any other person would.
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