What is different now?
So how can I get a good deal?
So let’s consider where you are most likely to find foreclosure deals. Some foreclosure homes for sale are listed on the Multiple Listing Service (MLS). These are the ones that you will find on multiple websites such as Realtor.com, Zillow.com and even websites of individual real estate brokers. But there are also homes that are sold at auction that are not listed on the syndicated MLS. These may be sold on websites such as auction.com and hudhomestore.com, or even auctioned locally. The foreclosures sold at auction are the ones that will likely have the least amount of competition and hence the best chance for bargains. So, “what’s the catch” you ask? The catch is that with many of these homes you will not be able to see the inside of the home because there are tenants or squatters there that you may have to evict once you buy the home. For those that are vacant, you may be able to go in, but you may not be able to have the home inspected. Sometimes inspections are allowed but if you don’t like the results you definitely can’t negotiate for repairs or allowances and you may not be entitled to get your deposit money back. Furthermore, some of these homes sold at auction do not come with a warrantable title, meaning you may be purchasing a property with liens or even disputed ownership.
How do foreclosures differ from regular sales?
- Sometimes in the case of a foreclosure, the bank (seller) will not pay all of the traditional closing costs paid by the seller, which in turn falls to the buyer to pay.
- Banks are very unlikely to negotiate based on the findings of your inspection. And this can prove tricky when your lender requires something to be repaired as a condition of your loan but the seller won’t allow you to fix anything.