Foreclosed/Bank Owned Homes Question?Someone please tell me what the catch is in buying bank owned/foreclosed/probate homes. I went to Trulia.com and ran a search: http://www.trulia.com/for_sale/North_Hollywood,CA/price;a_sort/ It returned tons of property with a listing price of basically nothing. How come everyone doesn't buy these deals... |
Foreclosures have a market price just like a regular home, of course cheaper. So the idea that foreclosed homes can be bought for pennies on the dollar is not the norm.
Foreclosed homes have a low price as they carry risk. Usually the buyer can not inspect the property and has to make a payment in full at the time of purchase.
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In my experience, the foreclosure listings - whether free sites or ones you pay for - are notoriously inaccurate.
Someone posted a link to a foreclosure site in here a few days ago. The question was to evaluate how your city was faring regarding foreclosures. Because I watch the MLS closely, I could identify about 20% - 25% of the properties listed there that had sold already. Nice scam to lure buyers of their "system" in that all these properties are up for sale at bargain prices.
Some of those listings are tax foreclosures, and since professional investors that watch local markets daily obtain these listings too, it is not possible those houses will sell for whatever annual tax is due. It's not going to happen.
And many of the mortgage foreclosures are a nice tease also. The foreclosure site lists a price, and that is the amount owed. Nowhere on these sites does it mention that the lender has paid for an appraisal or a BPO, and the lender will work off of that number, not the amount owed.
Many people are lured in by TV ads and media hype that foreclosures are a great deal. But in too many cases, they are just typical houses looking for a buyer. And some not savvy in the RE world will come in saying lenders need to clear houses off their books and will accept offers that are pennies on the dollar to real market value - and I just haven't seen or heard from anyone that this is the case. Most lenders are in a position to wait for a decent price.
From my experience as an agent in orange county, and looking at this site, it seems that the information of the properties that are really cheap are probably just a feature to get you to sign up. Be carefull. You can always contact your local Foreclosure/REO Realtor and get more accurate information for free.
good luck
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