Many people look for foreclosure property hoping to get a great bargain. Although there are fewer bargains to be had in the market today, there are still some good deals to be had. If you are considering purchasing a foreclosure property, there are some important differences in the purchase process that you need to understand. We know how to guide our clients through this process while protecting your interests.
When purchasing an REO, or 'real estate owned' property, it is important to know that the owner is no longer an individual or family. The property is held by a bank or asset management company. This means that the bank has never occupied the home, so they will not be required by law to disclose facts known about the house. Buyers of foreclosed property have less information about the history of the home and possible defects. While traditional sellers must tell everything they know, such as known neighborhood noise issues, past repairs, areas of the home that have been remodeled and anything that they know is not working, banks do not have the same responsibility to the buyer.
In addition, while buyers of traditionally owned homes can often negotiate with the seller for repairs that need to be made, buyers of bank owned property will often have to accept the property 'as is', even if there are major repairs needed. Sometimes the buyer's lender will require those repairs to be made before the close of escrow. This creates an impasse as the bank will not make the repairs required, and the buyer won't be allowed to complete the repairs during escrow, due to liability concerns. Therefore, the best candidates for purchasing foreclosures are clients who have financing in place with a direct lender who offers a renovation loan product. If you are interested, we can connect you with the right kind of lender to get you through the process.
Finally, buyers need to be aware that foreclosure property may have liens against the property which need to be cleared to own the home with free and clear title. We can help make sure you don't get stuck 'holding the bag' for the past owner's tax liens or weed abatement liens. You need a strong negotiator on your side to get through a foreclosure purchase, and we are here to help.
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