Because of the neglect and disrepair of most foreclosed homes, the repair list can be extensive and expensive. Know what costs are involved and incorporate those costs into the negotiations and the bottom line price.
Knoxville, TN (PRWEB) February 28, 2013
The Holloway Group, the leading Knoxville real estate team at Gables & Gates, REALTORS has posted a new article on their website titled, "Top 5 Things To Know About Buying Foreclosures".
Troy Stavros, Broker and Partner with the Holloway Group says, "Buying a foreclosure in Knoxville may seem like it should be just as easy as buying any home, but there are certain factors that make it more tricky. While some of the processes and procedures are the same, there are steps to take and things you should know going in, to help make the outcome a positive one."
Below are the Top 5 Things To Know About Buying Foreclosures:
#1: Forget the Auctions - If a buyer is reading this, then most likely they aren't a seasoned veteran of buying distressed properties. Why should novices steer clear of auctions? The auction process is far more risky. First, prospective buyers don't get a chance to inspect the home for damage or issues (two factors that are more common than not in a distressed property, because of the fact that the home may have sat vacant for a period of time or had unhappy owners leaving). Second, potential buyers don't have a chance to find out if there are any outstanding liens on the property for which the buyer will ultimately be responsible. Third, there is a chance that when buying at an auction, the owner that was foreclosed on may still be living in the home. Another big headache that can be costly from both a dollar and stress level. Fourth, most auctions require cash on hand, or the ability to pay the entire purchase price within a few days. This is not an option for most buyers.
#2: Buy From A Bank - All of the reasons to buy from a bank are the complete opposite of the reasons above. First, buyers get the opportunity to inspect the property. Second, the bank is required to pay off all liens and back taxes. Third, the owner will be long gone once the bank has foreclosed and if not the bank will have them removed prior to listing the home. Fourth, buyers have the time to get financing in place like a typical home sale.
#3: Get Pre-Approved - This is a step in the home buying process that the Holloway Group stresses whether buying a home in Knoxville that is distressed or non-distressed. To have the best opportunity to secure a home when negotiating, the buyer must be able to provide a pre-approval letter from a lender with any offer submitted. Most banks will not even accept an offer on a foreclosure without one. Not to mention, that by providing a pre-approval letter showing that the buyer has the ability to secure financing, is a serious motivator for any seller.
#4: Expect a Low Appraisal - Once the deal is agreed upon with the bank and the financing secured, there is one more hurdle to leap over, the appraisal. Appraisals have been know to come in low on distressed properties because of neglect, vandalism, or damage. A lender will only lend a buyer the amount for which the home appraises, so until that number comes in, don't breathe easy. Also if a buyer is planning on utilizing an FHA loan, there are additional strict regulations regarding the condition of the property, so FHA may require repairs to be completed prior to closing the loan.
#5: Be Prepared To Spend Money On Repairs - One of a distressed home buyer's best friends should be a contractor. Even before negotiating, a buyer should have an estimate from a contractor as to the price of repairs. Stavros stated, "Because of the neglect and disrepair of most foreclosed homes, the repair list can be extensive and expensive. Know what costs are involved and incorporate those costs into the negotiations and the bottom line price."
ABOUT THE HOLLOWAY GROUP AT GABLES & GATES, REALTORS
The Holloway Group is committed to bringing the best possible experience to fruition for buyers and sellers of Knoxville real estate. At the Holloway Group we don't believe average is good enough for our clients. At the forefront of the Holloway Group is experience. Our team was created to serve our clients even better with specialization and expertise. We know that individually we cannot be everything to everyone so we have come together as a group, bringing all of our different strengths, so you always work with the best. We pride ourselves on being ahead of the curve on technology and how it can serve our clients. When you are a client of the Holloway Group, you can expect to have our entire team of professionals working to fulfill your individual real estate goal. As a member of Leading Real Estate Companies of the World the Holloway Group and Gables & Gates, REALTORS can assist you with finding the most qualified real estate professional to suit your needs, anywhere in the world! Visit our website to search ALL Knoxville homes for sale. Contact us today for assistance.