This winter I’ve been running around Denver buying up foreclosures for investors wanting to fix them and use them for rental properties. Given this market and all the available foreclosure properties, this isn’t unusual. In fact, I’ve spoken with several of my real estate brethren who are doing the same thing yet never thought they’d find themselves working in the foreclosure market.
When buying a foreclosure from a bank you’ll notice a series of addendums in the paperwork outlining in no uncertain terms that the home you’re buying is being sold “as is,†meaning you can go ahead and do an inspection but even if your inspector finds problems the bank has no intention of fixing anything. Sounds convincing, but in reality I’ve found this more often than not to be false.
Agents should always ask for what buyers want and need. What’s the worst the bank can say? No. But even if that is the response there’s nothing lost. So after every inspection on a foreclosed house I ask the bankers if they will fix the items in the inspection report. The listing agent working on behalf of the bank usually gives me a hard time, presents the report, and in most cases I get concessions on all or some of the items. I say “concessions†because banks don’t fix inspection items; they simply give the buyer credits at closing. Roughly 80 percent of the banks I’ve dealt with will grant credits to repair inspection items. Now, not all banks are created equal, and I’ve heard stories about some that are incredibly difficult to deal with, not only for buyers but for realtors as well.
I think early in this foreclosure wave lending institutions had so many foreclosure files that no one was quite sure how to handle them. Now, a year or so down the road, banks are getting savvier at making deals and selling homes to people who can actually afford them. There are some great buys in the foreclosure arena, and if you decide to venture there don’t be afraid to push the envelope on those “as is†statements.
