Friday, December 28, 2007

What's a Foreclosure

While browsing real estate blogs I came across a post with this same title. It pointed out how banks are bad neighbors and all foreclosures are dumps.

Well, I'd agree I don't want a foreclosure next door, but I thought the post could have provided a little more information.

The blogger talked about how bad foreclosures are, and in many ways I agree. Every foreclosure has a story of someone's misfortune behind it.

But I would like to help home buyers. This is about real estate and I want to point out a few things in my experience that may be a little different than what that blogger had to say.

Many times the reason we see bank owned homes sitting with little activity, as if the bank doesn't care, is that Minnesota has a six month redemption period. Usually, the bank is not allowed to sell a foreclosed property for six months after the foreclosure. Frequently the property sits vacant through the redemption period without a for sale sign.

Once they get through the redemption period banks are quite anxious to see the home sold. The foreclosures I am familiar with are listed on the multiple listing right along with other homes. They are marketed by Realtors who make a living selling your home or your neighbor's home.

Banks are not always the disinterested seller. Some banks will counter an offer within twenty four hours of submission. The banks I have seen, clean out the home and do some fix up and repairs and sometimes purchase appliances to make the home more attractive.

When a bank sells a home they sell it "as is". This means what you see is what you get, it means you have the "right and duty" to inspect the property before you buy it. This is the most logical way to sell a property if you are an absentee owner like a bank, perhaps in another state and you never seen it.
Always look at the property more than once, always get an inspection, try to talk with a neighbor about the property history. Consider contacting the police to find out if it has a history of police calls to the property.

Bank owned properties can be dumps, but they can also be nice and sometimes they are a very good buy.

Here is an example of a bank owned home that is in good shape with an impressive price. The photo above is of the front entry.
Here is an example of a bank owned property in a nice neighborhood priced way below market value, in nice shape and at least as good as many of the homes around it.
While the current foreclosure situation is a disaster for some, it could be an opportunity for you.

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