Foreclosure Listings

Distressed properties offer opportunities for bargain seeking home-buyers, but they also come with a number of challenges specific to foreclosed homes and short sales. Foreclosure listings are homes that have been repossessed by the bank and are now on the market to recoup their losses. There are some definite benefits to foreclosure listings, as well as some drawbacks.

Benefits of Foreclosure Listings

Foreclosure listings are often priced to sell. Not only that, foreclosure listings are often vacant, meaning you can move in much more quickly, without worrying about the contract being contingent on the current homeowner finding a new home. Because of the low price point for foreclosure listings, distressed properties are often popular among first time home-buyers.

Disadvantages of Foreclosure Listings

Buying a foreclosed home is almost always done on the bank’s terms. That means that you’re not going to have a lot of wiggle room for negotiation and it’ll be very rare that you get them to come down on the price. Foreclosure listings are often “sold as-is” which means that you can’t bargain with them based on repairs. And foreclosure listings almost always need repairs, since the homeowner didn’t likely have the cash on hand to do regular maintenance, update appliances or keep the heating system well-maintained. Vacant homes may also need to have electricity and other utilities hooked up again. Granted, you can make your offer contingent upon inspection and you can back out if there is anything seriously wrong with the home - but you’ll eat the inspection costs.

Banks are also very stringent regarding mortgage preapproval. Banks want to move quickly, and they won’t accept offers if you don’t have financing lined up. When making an offer on a foreclosure listing, you need to put your best price on the table immediately, since there won’t be a lot of back and forth. Foreclosure listings also tend to go fast, and if someone swoops in with a slightly better offer than you, the bank isn’t going to wait for you to try to one up them.

Lastly, you shouldn’t assume that a foreclosure home is always a bargain. You still need to check out comparable homes and do your research for the area to ensure that you’re getting a good deal.

The best way to find foreclosure listings is to work with a real estate agent who specializes in foreclosures. They will be able to show you their listings and guide you through the process.