Real Estate - Buying Foreclosure Property

We are seeing more foreclosures listed for sale. Almost daily I have someone who expresses interest in buying one of these “bargain” properties. They are certainly priced to sell, but you need to make sure you know what you’re getting into.

The seller (the bank in most instances) has not lived in the property, so there is no requirement to disclose problems. It’s entirely up to the buyer to identify the issues and costs to repair them. Of course, with an FHA foreclosure there may be an assessment of the situation but there is no guarantee that their list is complete. And, since the previous owner most likely left involuntarily you run the risk that there are problems that are not readily apparent.

These homes are most often purchased by investors who are prepared to take on the risks associated with them. For the average homebuyer who is stretched to come up with the down payment and/or closing costs, the foreclosure property may not be such a good option.

Issues can also arise in the appraisal process. If the appraiser recommends repairs, the seller and lender must be willing to agree on how this will be taken care of. Generally the seller (the bank) isn’t willing to make any repairs and the buyer can’t make repairs until they own the property. Since the lender won’t extend a loan without a clean appraisal, you’re stuck.

For these and other reasons, I usually recommend that you dig a bit deeper to find a property that has some investment opportunity and can be purchased for a fair price without taking on so much risk.

If you’d like to talk further about how you can put my Nashville-Middle Tennessee Real Estate Services to work for you, visit my web site by clicking HERE. To search the MLS listings for Nashville-Middle Tennessee real estate, there is a Quick Search feature in the left column. You can even sign-up for Property Alerts so that you'll be notified whenever a property comes on the market that meets your criteria.