Are Foreclosures a Bargain?
There are many homes on the market right now that are bank-owned. Are they a bargain? In most cases, no.
There seems to be a myth that banks sell these homes for what is owed on them or at a discounted price. Not true. Banks usually get a couple of price opinions and an appraisal to determine the value of a property before putting it on the market.
However, once the property is on the market for a time they will start reducing the price just like any other seller would.
Surprisingly the best source for information on foreclosed properties is through your local real estate agent. The web sites that feature foreclosures are not always up-to-date, and some sell your information to real estate agents as leads. Most banks work with and hire real estate agent to list and sell the properties they own.
Buying bank-owned homes is a little different from a “regular” home because banks have their own rules and policies. Offers are usually presented via fax and it sometimes takes days (or weeks!) to get an answer. Offers need to be perfect and complete with special clauses that the banks require.
In addition, foreclosed homes are always sold “as is”. The owners/bankers usually have never seen the property and will not take responsibility for its condition.
