Most people who are looking at foreclosures are hoping for a bargain. Foreclosures can be a great way to find a deal on a home, but not the only way, as Realtor® Cam McLeod explains.
Foreclosure properties aren’t for everyone. Cam says, “A lot of foreclosures are in a state of disrepair, so buyers can’t be afraid to get their hands dirty.”
These are typically fixer-upper properties, and they do have their advantages. For some, it’s a more affordable way to get into the neighbourhood they want to live in, or to buy a larger home, or perhaps to be able to jump into the housing market in the first place. In most cases foreclosure properties actually sell at fair market value, based on the additional cost of restoring them to a better condition.
Foreclosure Buying Tips
Cam recommends that people looking at foreclosures give themselves plenty of time to buy. All foreclosures involve an extra step in the buying process; after an offer is accepted and all subjects are removed, the deal is then subject to court approval. A court date is set, usually about three weeks after the last subject is removed, and then, if the bid is successful, the possession date will typically be about three weeks after that.
In court, other interested parties will have the opportunity to bid on the property. This means it may take you more time to find a home if yours isn’t the winning bid.
Cam’s advice on bidding? Firstly, have a good Realtor® by your side. Secondly,
“Set yourself a price that is fair market value and stick to it. People can get carried away during the bidding process and end up paying too much.”
Cam suggests limiting your foreclosure search to vacant properties. He estimates about 50% of foreclosures on the market in Prince George are vacant, and those properties are much less risky for buyers. Foreclosures are sold, “as is, where is,” meaning if the current occupant is still living in the property until the possession date, they have plenty of time after the buyer has closed the deal to do some serious damage. If that happens, the buyer still has to accept the property as is when they take ownership of it.
Buyers should also be aware that banks do not have to disclose any known issues with foreclosure properties, for instance if there was any flooding or fire damage in the past.
Every once in a while, really great deals do come up on foreclosures, but there are other deals available, and because of the information and networks they have access to, a Realtor® is the best person to find those deals for you.
“If you’re trying to find a good deal in real estate, you need a Realtor® looking out for you, whether it’s a foreclosure or a single family home,” Cam says.
Find a Realtor® you trust and feel comfortable working with. They will take the time to sit down with you and figure out exactly what you’re looking for, and they can have an in depth discussion with you about foreclosures and other properties that you’re interested in.
“That Realtor® will go to bat for you and work hard to find you the right property at the right price. But if you’re looking for a good deal, be ready for a good deal,” Cam says.
This means getting your finances in order first by prequalifying for a mortgage, and being available to view properties when amazing opportunities come up. Great deals get snapped up quickly, and if you have a Realtor® working hard to make something happen, try to be as committed to them as they are to you.
If you’re looking for a Realtor® to discuss foreclosures and other home buying opportunities, get in touch with Team Powerhouse Realty today. We work with buyers and sellers in Prince George, BC and surrounding areas.