Thursday, 25th of September 2008 at 08:00:58 AMOver the weekend, I took a couple around to look at some listings. It was interesting, they called because they found a foreclosed property while driving around and the price on the flier excited them. They felt it was rather low. We started off talking about it, reviewed the flier and I called the listing agent. No answer, but his message referred me to his partner. I called his partner, the house was vacant, and honestly, they weren’t sure what was going to happen to the house. It wasn’t on lock box, and frankly, since the disposition of the house was unknown, he refused to met us for a showing (???), I asked if we can look in the windows and walk around the property, which he said would be fine.A little bit of research and I found that the builder is still building this floor plan in Stetson Valley, so I map out their sales office location and out the door we go. Our first stop is the Foreclosed property where the most we can do is look into windows. We find that the house is in dis-repair. Appliances are missing, some of the light and plumbing fixtures are missing as well as the carpet. From what I can gather from the legal records and the overall look of the home, no one has lived in it’s 2 year existence, but people have still stripped items out of it. It sits on the edge of Stetson Valley and faces a mountain with no back side neighbors. This appeals to the couple. We make some notes, determine to restore this house to livable status would require about $35,000 out of pocket and some work. They are interested in this home, so I suggest we look inside of a comparable floor plan.
After a little Real-speak (Realtor to Realtor talk), we get the keys for a move in ready spec home of the same floor plan. They like the floor plan and some of the details that the builder has put into the spec home. For an additional $50,000, they can have the spec without all the headaches. The builders agent also suggested another spec of a different floor plan and we check that one out. The flow and location don’t appeal to the couple, but the last spec is still a topic of discussion.
We decide to visit another builder and check out their models, which they love. One of the floor plans has a spec that is just 30 days from completion, so we’re off to see this one. It’s location is great, only one neighbor, a grassy area to one side, close to some hiking. Large lot, good size home, they like the floor plan and the flow of the home. They are talking about where furniture will go, how their dogs will enjoy the grassy area next door. They really start to see themselves in this home. And they love the fact that it is only $40,000 more than the foreclosed property. No headaches, can move in a few short weeks. I can now understand why the agent didn’t know what would happen with that property, it’s just not competing with the new builds right now.
Unless you are an investor with cash in hand and can get the better deals, I’d really suggest not bothering with the bank owned or foreclosed properties, there are just too many headaches for the everyday buyer to take on.
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I loved the post! I’ve helped quite a few buyers with bank-owned properties; and sometimes they are the right fit and a great deal; and sometimes they aren’t. But the one thing they always are is challenging.