MANGROVE REALTY ASSOCIATES
Lori Madden, MANGROVE REALTY ASSOCIATES
Email: [email protected]

Have You Fallen in Love With a Foreclosed Property? Here's What You Need to Know

by Lori Madden 01/10/2021

Photo by Paul Brennan via Pixabay

If you're like many prospective homeowners who've been looking at listings lately in preparation for moving forward with purchasing property, you've noticed listings for foreclosures. Some people in your position are attracted by the idea of saving money on foreclosures, while others may simply have fallen in love with a home that just happens to have been repossessed by the lending institution. Foreclosures are sold primarily in two ways — through public auctions and by private sales by the banks that own the property. Here's what you need to know about buying a foreclosed property.

Foreclosed Properties Are Sold As-Is

Homeowners typically at least apply a fresh coat of paint and perform basic repairs before putting their properties on the market, but foreclosed properties are sold as-is. Because most of them have been sitting empty for quite some time, they may require serious repairs. You may think you're getting quite a bargain and wind up having to pay so much for repairs that you actually haven't saved any money. 

Foreclosure Auctions Can Be Tricky

You won't be allowed to see the home prior to the foreclosure auction, so you'll be basically flying blind when you make your bid — and this means that you have no way of knowing what repairs the inside of the home may need to make it livable and how much they will cost. Although you certainly can drive by the property and see what kind of condition the exterior and the yard are in, you legally can't enter it. Another issue with foreclosure auctions is that most of those who attend are professional real estate investors who are very familiar with the auction process who can easily outbid the average inexperienced bidder provided the property is worth what they want to pay. Furthermore, auction sales of foreclosures need to be paid for in cash, and most buyers simply don't have as much free liquid capital as investors do.

A Good Agent Can Help You Navigate a Foreclosure Purchase

However, if you've fallen in love with a particular foreclosure and it's not yet slated to be sold at auction, a good real estate agent may be able to help you purchase it.  Buying a bank-owned foreclosure comes with far fewer obstacles than purchasing their counterparts that are available via the auction process, and a skilled agent can walk you through it. You'll be able to inspect the property and get an idea of what repairs are going to run, which will provide you with protection against unforeseen financial losses. Bank-owned foreclosure sales happen just like their conventional counterparts, and it's also possible to get financing on foreclosed properties in this stage.  

About the Author
Author

Lori Madden

As a Florida native growing up in Sarasota, I have seen my hometown grow from a sleepy coastal town to a highly sought-after destination along the shores of the Gulf of Mexico. After working in Chicago for 5 years, I returned to Sarasota and saw it through a new lens and really began to appreciate what makes Sarasota so desirable, including temperatures that allow for year round outdoor activities including tennis (a personal favorite), golf, boating, kayaking, fishing, paddle boarding, or just relaxing and/or shelling on our pristine sandy shores, including Dr. Beach’s #1 beach in the United States for 2017, Siesta Key! Sarasota’s cultural amenities are many and diverse, appealing to a wide range of arts lovers. Downtown Sarasota has become a destination in itself, drawing many new developments for those who want to be within walking distance of Main Street's offerings and the picturesque bayfront and marina. Foodies will find an eclectic mix of locally owned and operated restaurants offering something for everyone, and there are now Farmers Markets every day of the week in various locations throughout Sarasota, but the Saturday morning Farmers Market in downtown Sarasota draws the biggest crowds. Since 1988, my passion has been selling real estate, representing both buyers and sellers. I have been recognized by my clients and customers for an uncompromising work ethic and dedication to helping them achieve their real estate goals. Relying on my experience as a real estate paralegal and being highly organized, I am able to help make the transition between contract and closing a smooth one for my clients. With an eye for interior and landscape design, I've been known to pitch in and help Sellers minimize and/or reorganize their belongings in order to stage their home to maximize its sale potential. I specialize in out of state buyers looking for their piece of paradise along the Gulf Coast and make it a priority to keep them up to date on our quickly changing local real estate market. I welcome the opportunity to share with you all Sarasota and her surrounding islands have to offer!