We held a seminar 5 weeks ago on "How to purchase a Foreclosure". We discussed what to look for when buying a Foreclosure that the bank won`t tell you. It`s hard to imagine people attempting to place an offer on a "Bank Owned" property without the assistance of an attorney or trained Real Estate Professional.

There are certain aspects of purchasing a Foreclosure that many have no idea what to look for.

The following items below were discussed.

1- Inspection: Prior to making an offer it`s extremely important to conduct a "Full" inspection. Roof, appliances,Air Conditioner,termites,mold,and structural damage need to be carefully checked. Make sure prior to inspection that the electricity is on.Banks sell these homes in "AS IS" condition, meaning once a contract is executed all repairs are your responsibility.

2- Back Taxes: Check with the county in regards to back taxes owed. I can`t tell you ho many times at closing there are "Taxes Owed" which isn`t included in the sales price.

3-Special Contracts or Addendums: Majority of Banks insist you use their contract "To Purchase", I strongly suggest that you`re attorney review these contracts prior to signing.

4- Bank select Title Companies: I always negotiate for the Bank to pay for Buyers Closing Costs. Worst case scenario is the Bank will say no,in most cases, they`re willing to pay a portion of these costs. It never hurts to ask.

5- Repair Costs: I hate the term "Cosmetic".There are times when cracked tile are there for a reason, bad grout,rotted fascia,etc. Have someone who can give you a "Dollar Amount" on what it costs to repair the home you`re looking at. Add that to the actual budget. I like to tell our clients to budget a minimum of $10K towards repairs.

Generally, people who have been Foreclosed are unable to properly maintain their homes. They allow appliances,yards, pools,to be unattended too. Remember it could take 6-9 months for these people to vacate their homes. They`re not putting any money into maintaining these homes, so it`s up to you to investigate.

Before, looking at buying a Foreclosure consider hiring a Realtor who specializes in dealing with the lenders and has access to people who can look at a home objectively and tell you the actual condition. Buying a Foreclosure has it`s benefits,so does hiring a professional to be there every step of the way.

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