Buying a Foreclosure – What to Expect
It’s difficult to tell people what to expect when buying a foreclosure, because they are all so different. Basically, you should expect the unexpected! However, there are some things you can expect.
The Expected: Unless you are paying with cash you can expect a foreclosure purchase to take longer than if you are purchasing from a traditional seller. You’ll want to anticipate at least 45 days.
The Unexpected: I recently had one close 10 days early. Be prepared for it to take awhile though. Much of the delay with a foreclosure is the selling institution. Some foreclosures are bank foreclosures, some are HUD homes, and some are Fannie Mae. My experience has taught me that the Fannie Mae homes tend to take longer. One Fannie Mae property has taken over 65 days to get it completed. The wait is not because of the buyer’s agent or the buyer’s lender. Patience is very important during this process.
The Expected: You may not get the keys the day you close. You won’t get the keys until funding happens. This isn’t likely to be at the time you sign, because the final HUD-1 has to go back to the seller for his approval.
The Unexpected: One time it took four days for the seller to return the final HUD-1 to the Title company.
The Expected: You should have ten days to inspect the property.
The Unexpected: You might not.
The Expected: The seller is not likely to make any repairs or try to find out any additional information. If you have a concern about something, the investigation is on your shoulders.
The Unexpected: Two days before closing the air conditioner has been stolen. Seller replaced it.
The Expected: You aren’t likely to make a killing on the price. The list price is usually pretty close to what the bank is going to accept. That’s why some are on the market for six months. It doesn’t mean you can now offer $30,000 less. Most of the time, the seller does not negotiate on price. They either accept it, or they don’t.
The Unexpected: The house sometimes will go for thousands more than list price. Regardless of your offer, the home will still have to appraise for that value.
The Unexpected: A counter offer on price has happened. once..or twice.
The Expected: Utilities will not be on.
The Unexpected: Flip and switch and there is light.
The Expected: The home will be the way the homeowner left it.
The Unexpected: Bank replaced all carpeting and appliances. (Prior to a contract on the house)
The Expected: You will find a home you love.
The Unexpected: It was even better than you thought!
As a Realtor, I am not in the sales business. It doesn’t serve any of us for me to try to convince you to buy a house. I’m in the education business. I love helping buyers become more informed consumers. Give me a call and we’ll chat! 817-914-4987
