Foreclosed homes are all over news right now. Everywhere you turn someone is talking about all the foreclosures in the country and how they are effecting the economy. You have seen many infomercials trying to sell you the secret to buying foreclosed homes for pennies on the dollar and turning them into money making machines, but it is not as easy as it sounds.
Topeka is not flooded with foreclosed properties, and as we discussed before, the real estate market in Topeka just hasn’t taken the dive many other cities have over the past year.
In today’s market the banks are working hard to recoup as much of their loss as possible. They are not pricing their homes at pennies on the dollar and typically have multiple opinions from professional REALTORS® to determine the value of the properties they own. Most foreclosure properties are valued at or close to fair market value. There are some great buys out there and you can save money buying a foreclosed home, but make sure you really are saving money before you sign on the dotted line!
If you do find a foreclosed property that you are interested in and are ready to have your agent put in an offer, keep in mind that the bank doesn’t think like a normal seller. They have no emotional involvement in the transaction, this home is just a loan number in the computer system to them. They do not have to sell and will usually bend on their price a bit, but if the dollars net to them from an offer doesn’t fit in their guidelines, they simply reject it. They also will not make any repairs and prefer that you don’t even have inspections at all. They will let you have them, but still expect you to buy the home AS-IS. This is typically a problem if you are using an FHA loan to purchase your home because of the FHA guidelines and standards a home must meet and be corrected before an FHA loan can be granted.
Even though you may save a few buck on the purchase, some of these home are move-in ready and won’t require any repairs at all. With most you must take into account what repairs will be needed to complete to bring the home up to your standard of living, before you submit an offer. If you can purchase the home for $10,000 below market value, but it requires $15,000 in repairs, new carpet, and paint….how much money did you save buying a foreclosure?
Many buyers call our office asking for a list of foreclosed homes thinking they are going to get a steal of a deal, but be aware that the repairs that may be needed and the cosmetic work you may have to put into it, may make the idea of buying a foreclosed property a little less appealing for most people. There are some bargains to be had with foreclosed home, just be sure you evaluate all the numbers before you jump right in.
If you’d like to see what is available with a free list of foreclosed properties call us at (785) 271-0348.
