Foreclosures are a popular choice with buyers. However, they do come with some risks. That doesn’t mean they aren’t worth the effort, though. If you know what to expect with a Lake of the Ozarks or Truman Lake foreclosure, you are better armed to make a wise decision when it comes time to decide whether to purchase a foreclosure or go with a traditional home sale.
The biggest risks associated with a foreclosure come when you go through a foreclosure auction. Buyers typically bid on a property sight unseen. That means that bidders aren’t usually allowed to go inside and take a look around or have the opportunity to fully investigate the history of the property to make sure there are no liens attached. Since a large percentage of foreclosed homes don’t make it through the auction process, they then revert back to the mortgage companies and are resold through an REO. This can be helpful to you as a Twin Lakes buyer because you can do a bit more investigating of the property before deciding to buy it.
REO’s are sold “as is”. This literally means that what you see is what you get. Banks may make some repairs before they sell the Lake of the Ozarks/Truman Lake home but don’t expect that you will be able to negotiate a lower price based on the amount of repairs needed as you would in a traditional home sale. That is why it’s a good idea to have a contractor come with you to make an estimate on what needs to be repaired or replaced before you put your offer in so you can assess whether it is worth it to you to buy the property.
A home inspection is of particular importance when considering a foreclosure. A professional home inspector will be able to tell you the condition of the property as well as make suggestions as to what issues are critical and what you may be able to expect to have to replace or repair down the road. Make sure that the roof is inspected (as it can be a major cost to replace) as well as an inspection of the sewer line and pool (if appropriate). Since the home inspection will not cover pests (such as termites and mice), you may need to have a pest expert come in to inspect the property as well. Even though these inspections will cost some money, it’s worth the peace of mind to avoid thousands of “surprise expenses” down the road.
Be patient and expect to compromise a bit. There are many unexpected contingencies when dealing with a foreclosure. For example, the bank may require that you use their escrow company instead of one that you want in order to make the deal happen. Also, banks can be notoriously slow in getting paperwork completed in a timely manner. Speed bumps are bound to happen.
Above all, read a contract completely before signing anything. If you have questions, ask them. Have your financial advisers, real estate agent, lawyers, etc, read over the contract to get their expert opinion. Never sign anything without thoroughly reading through its contents and understanding exactly what you are signing.
Buying a foreclosure can be a sound financial decision. Be prepared for what to expect with a foreclosure and you will lessen the chance of being hit with surprises. The road to homeownership can be a rough one sometimes. But you’ll have to agree that it can be well worth the trip. If you are interested in purchasing a home in the Warsaw area, please contact us today!