Foreclosures: What you should know BEFORE you make an offer, Part 2
November 16th, 2007categories: Anatomy of a Chico CA Real Estate Transaction, Chico Buyers, Chico CA Foreclosure Listings
This is part 2 in a series of helpful hints to purchasing foreclosures in Chico, CA.
Did you miss part 1? Read here.
Bank-owned property (REO) is some of the most sought-after Chico CA real estate of all time. In a market where many buyers are sitting on the fence waiting for the bottom to fall out, savvy investors are picking up REO’s as fast as Chico Realtors can churn them out!
Before offering on a Chico, CA REO property, you should know:
1. Most REO property won’t leave you feeling all warm and fuzzy.
First time home-buyers are often gleeful when they get their first look at the home they will eventually buy. “It’s just so CUTE!” they declare. They oooh and aaah over the carefully groomed, staged and scented home visualizing Thanksgiving Dinners and Christmas trees.
REO property often takes a little more imagination. You have to try to pretend that the yard is not dead, the house isn’t lime green, the walls don’t have holes in them, the kitchen appliances and fixtures are actually there, and the flooring isn’t all torn up. That is, if you can get past the unbelievable stench and filth of lives gone horribly wrong.
To be fair, there are nice, clean Chico REO properties to be had- there are. But oftentimes, an REO house is one that shows evidence of severe neglect and outright abuse on the part of an angry or desperate previous owner.
2. Don’t expect the bank to pretty it all up for you!
The banks usually prefer to sell “as is.” Minimally, they will do an initial “trash out” to remove the belongings left in or on the property. In addition, they will re-key, board up windows, and winterize. It is unlikely that measures will be taken to add appeal- if the sinks, lights, appliances and windows are missing, they are likely to stay that way. Exception: if the buyer’s lender requires a repair (or 10) to fund the loan, the bank may negotiate the cost of the repairs. In a competitive REO market, however, they won’t need to do any repairs- a cash buyer will snatch it right up in it’s current condition.
3. The bank won’t tell you what’s wrong with the house, because they don’t know.
A traditional seller is required to provide you with a laundry list of everything they know to be wrong with the property. In the case of an REO property, the seller has never even seen the property, let alone lived in it. The bank has no idea if the handrail is loose, if there are barking dogs next door, or if meth was manufactured in the second bedroom. Make sure that you do any inspections necessary to ensure that you have a good grasp on the condition of the property- very little information will be provided to you by the seller.
Coming soon! What you should know BEFORE you make an offer, Part 3.
Like what you’re reading?
Click here to SUBSCRIBE to Chico CA Real Estate Blog and MLS Listings Search!
By the way, if you like the yellow house in the picture…. it can be yours for ONLY $79,900! That is $55,000 less than any other stick built home in Paradise CA!!
Great article about purchasing foreclosures in Chico, CA. It sounds like smart investors are jumping on bank-owned (REO) property in your real estate market. –Bob
Wow Sandi-You’ve a great understanding of foreclosure and REO’s- I think you’ve got Chico REO home’s covered.A good warning for first-time buyers too. Great work Sandi, I’m excited to be able to recommend you for buyers of Chico real estate. Terry McDonald
Sandi, Thanks for the articles on buying foreclosure homes and bank owned properties in Chico. I almost daily have people asking me about buying foreclosed homes, all assuming there are bargains galore out there. I have found it to be otherwise in my market. You did a great job of adding a dose of reality to REO homes in the Chico real estate market.
Great post(s)
Karl
Sandi - Excellent information for homebuyers in Chico considering the elusive oportunity in foreclosures. Many times, my clients and I have not made it through the front door, once we saw the pigeon droppings.:)
I was just wondering about the house for rent on shast st in willows ca. just wanted to know if is was still available and if so how would i be able to get an application? please contact me back ASAP thank you.
Hi Danielle,
The house on Shasta Street, assuming that you are asking about my listing on 143 S Shasta, is not for rent, only for sale at $117,900. If you would like to consult with a mortgage broker to determine if the house might be right for you to purchase, I can help!
Sandi