How do you buy a foreclosure home? VERY CAREFULLY! And here’s where it really pays to hire expert representation to protect your interests, guide you safely through the process, and win the right battles for you.
For example, as of December 27th, 2010 in Sonoma County, CA, there were 367 foreclosure homes out of a total of 2145 homes for sale, about 17% of the market. There were also 701 homes on the market being sold “short”, or 33% of the market. All of them are listed for sale on the MLS, right along with properties listed by normal sellers and those scheduled for sale on an auction web-site.
There is a big difference however, in dealing with a bank seller vs. a normal seller. With foreclosure listings typically “teaser priced”, expect to be in “highest and best” bidding wars against other buyers, signing 20+ pages of fine print waiving all your rights against the seller (bank), finding out the property won’t finance because of its condition, having only 7-10 days or less for inspections, having to pay for any and all inspections yourself, being dinged for “penalty fees” if you don’t close escrow on the date agreed, and having the seller try to force you to use the seller’s escrow, which may actually have power-of-attorney for the seller instead of being a neutral third party as expected. (BTW, forcing a buyer or threatening not to accept a buyer’s offer unless the buyer uses the seller’s escrow is against California State Law. Don’t let it happen to you.)
Why do buyers still offer on and purchase foreclosures? Because the property can be a great deal! Buyers just have to shop and buy very selectively and carefully! cj