If you’re thinking about buying a foreclosure in Winchester VA, there are certain things you should know. Foreclosures can be great buys, and many of them are listed at bargain prices. But, and there is always a but, foreclosure purchases do have characteristics that aren’t always like fair market sales.
- A foreclosure becomes known as an REO (real estate owned) once the homeowner has lost it and the lender has taken control of it. Most consumers don’t know the difference, so “foreclosure” is often used to avoid confusion.
- A foreclosure is typically sold “as-is”. That may mean that some repairs will NOT be made. Lenders will usually take care of any problems that could be considered a hazard. For instance, an electrical meter has been tampered with and someone could stick his hand inside of it and get electrocuted. Water, air, mold, heating and structural issues also come to mind when considering repairs that are hazardous. They may end up being negotiated.
- Lenders really don’t care who you are. They will not discriminate against you for any reason. They view you from data on a piece of paper as a potential buyer who they will never see, hear from or get to know. All they want to know is, “Can you buy the property?” If they seem like they are being hard to get along with, it’s not personal. When a bank’s asset manager has 200 files sitting on his desk, he doesn’t have time to discriminate.
- Banks who are trying to liquidate their REOs are not like a seller who has to sell. You can’t demand things from them. Expecting the same level of response time, offerings of closing costs or just about anything else is more than likely going to frustrate you. If you start demanding things during the negotiations, they will just say, “Next.”
- Threatening a bank with legal action because they are not responding to your demands will not win their favor, approval or respect. Again, their response will be, “Next.”
- When you buy a foreclosure, you normally buy caveat emptor. Buyer beware. That doesn’t mean that all foreclosures are dumps in terrible condition. It can be quite the opposite. A bank in California may not have a clue what a house in Winchester, VA looks like. So, they can’t afford to make any disclosures or promises about a property they will never see. You buy at your own risk.
- Some banks will work with you on closing costs and some will not.
- Banks may charge you a daily per diem if for some reason you cannot close on time. I’ve seen it go up to $150 a day. It’s best to have all of your paperwork ready, as well as your loan approval done on time. Make sure you’re ready to get busy once the bank agrees to your offer to purchase. You should already be pre-qualified for a loan before you start. It’s better to be pre-approved.
- The less complicated your contract is, the better chance you have of getting the property. Adding a bunch of contingencies or conditions only makes the next contract more attractive, and banks will gladly accept a pile of contracts before they make a decision. Keep it simple. Some things are unavoidable like a final loan approval, but you can skip some contingencies. Talk to your Cornerstone agent.
Don’t give up on foreclosures because they’re more work. A foreclosure might be the buy of a lifetime. It takes patience and understanding, and when you’re ready to buy a Winchester VA foreclosure, give your Cornerstone agent a call.