If you have clients who are interested in purchasing a foreclosure, let them know they can enlist your expertise. That kind of purchase is not without its special challenges, according to Warren Reeder, a third-generation Realtor with his family-owned business, Reeder Cos. of Hammond, Ind.
“My first home I purchased was a foreclosure,” Reeder said in the NWI Times article “Realtors can help with buying a foreclosed home,” by correspondent Jane Ammeson, “It was an extremely stressful process, but in the end, I had a completely remodeled home to my taste and a good amount of immediate equity,” he said. “After that, I was hooked on helping other people purchase foreclosures and fix them up.”
Reeder said working with a Realtor who is knowledgeable with foreclosures helps navigate what can be a confusing process. Because most foreclosures are sold as-is and usually require extensive repairs, Reeder said you cannot use a regular Federal Housing Administration and Veteran Affairs or conventional loan to make such a purchase. Having an experienced Realtor who knows the market can determine whether or not your offer gets accepted, he noted.
In addition, a Realtor would be prepared to deal with certain issues that a buyer would not expect. For example, Reeder said, a buyer may not anticipate that a title search didn’t cover past-due water bills while that is something a Realtor would consider.
“On several occasions, I have called the water department a few days prior to closing and discovered $ 500 or more bills from previous owners that the buyer would’ve been responsible for paying after closing,” Reeder said in the article. “Buying any home can be tricky, but foreclosures often are the most difficult to purchase, and a Realtor can help make the process much more smooth and lucrative.”
Before encouraging your client to buy a foreclosure, be sure he understands this kind of purchase almost always brings more stress than a conventional home purchase.
“So mentally, you have to be prepared for a roller coaster ride of emotions,” Reeder wrote in the article. “If you are engaged and planning your wedding, pregnant, doing night school on top of your full-time job, it may not be a good idea to add any unneeded stress to your plate.”