Everyone loves a bargain! Whether it is special, half-price sell or a huge real estate discount courtesy of purchasing a foreclosure, saving money is a thrill.
Many times, the discount promoted is the only discount offered as a bank’s bottom-line cash value, which makes sure they do not take too much of a financial hit on the sale. One such scenario is when a person buys a foreclosed home because many times the properties are sold “as is” and repairs need to be made.
Diane got a killer deal on a two-bedroom, two-bathroom condo in Hollywood that she opted to purchase an REO. Upon the inspection, some repairs were brought to her attention. Because the bank stated the property was being sold “as is” she realized that if she wanted that home, she would have to foot the bill for all tweaks that needed to be done.
However, since Diane got the home for 35% less then market value and $14,000 less then the asking price, she had the money she needed to pay for the repairs herself.
Buying direct from the homeowners
When homebuyers purchase directly from the seller, there is a standard negotiation process that occurs. There is the listing price, the buyers price and somehow that ends up with a selling price.
Depending on market conditions, if a buyer gets an inspection and certain “red flag” repairs are pointed out, there is indeed some wiggle room left as there are human beings who are personally invested in the transaction who want to close the deal.
Getting a bank to pay for the repairs
However, when it comes to purchasing a foreclosed property from a bank, the financial institution is really only concerned about their bottom line.
They know how much money they need to take in to ensure that the financial blow they took on the foreclosure is at a minimum. Foreclosed properties tend to sell for 5%-35% less then other properties and at that point the bank is not interested in making any necessary repairs or negotiating the price down.