Buying a Foreclosure in Boulder County
By Michael Hughes January 3, 2010
Buying a foreclosure is enticing and finding a good one can be a challenge.
While foreclosure inventory is down a bit right now there is an escrow of foreclosed properties coming on to the market in 2010 that may dwarf the past inventories. Many owners were allowed to stay in their homes as the bank saw this as an opportunity to have someone in the house keep it warm, vandal free and protect their asset.
While not all homes are in pristine condition, you will most likely from a visual inspection see if there is any additional work. Occasionally people who are being foreclosed on will vandalize and/or strip the property of appliances, counters, cabinets, etc. When this happens at a greater level it is difficult for a bank to loan on that property. Many of the holding banks know this and will generally replace the kitchen so that it is functional.
Buyers with cash will often but not always win a bidding war even at a lower price. The word “foreclosure” does not necessarily mean “good deal.” Previous owners have been known to damage the property.
Start searching. I have many REO or “Bank Owned” properties in Boulder County. Call me today 303-359-6627 or go to my website www.bolderrealestate.com and sign up for the REO or Foreclosure update. I work with REO’s often and know where they can be found.
Lenders won’t be able to give you a property disclosure as they have not lived in the property. In this instance while the bank may say “As Is Where Is” you should still have a full inspection once your offer is accepted. Don’t get me wrong there are great deals out there, some not so much, definitely buyer beware. Inspect thoroughly.
Other issues could pop up due to the property being vacant. Large banks will often hire a field service to cut the grass, shovel the snow and winterize a home, yet when homes aren’t occupied, it’s harder to catch small problems before they become big ones. The water, gas and electric will need to be turned on for a full inspection. Sometimes the bank will charge a buyer for this, usually under $150 and can be negotiated.
The time it takes to complete the sale can vary from lender to lender. In some cases, the process goes smoothly. Other lenders are overwhelmed with the number of foreclosures on their desks and/or disorganized. It really depends with which bank and who you are doing business with. Writing a clean offer helps streamline the process.
For your best chance at having an offer accepted and for a quick closing process, have everything in order before making the offer. This includes having the financing firmed up and writing a clean offer. In other words factoring something you want fixed in to your offering price.
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But don’t expect to bargain the listing price way down right away. Also, don’t be surprised if the bank that is selling the property asks you to get an approval from its mortgage operation; you more than likely don’t have to take the loan from their company, but they may want to get a closer look at your finances to make sure you’re a real buyer and able to make payments. I have submitted and had accepted many offers for bank owned properties and have found following their directions when in the best interest of my buyer is the fastest approach to closing the property with all partys content.
For help with REO’s or foreclosures call me Michael at 303-359-6627 or contact me at www.bolderrealestate.com and sign up for the REO update.