Purchasing a foreclosed home or a court ordered sale can sometimes save you some money, but with that also comes some risk.
The seller will have gotten a current appraisal along with an evaluation from a realtor. Some people think you can buy these homes for $20,000 to $30,000 less than the listed price, but typically that is not the case. To be sure you are not overpaying have your realtor do a market evaluation on the property then you can determine what you should be paying for that property.
The offer to purchase for a foreclosed/court ordered sale have changes to them as compared to our regularly used offer to purchase.
Some of these are as follows:
You are buying the home “as is where is”. If there was a previous issue with the home, for example if there was a water problem you have no recourse against the seller. In our usual offer to purchase, it states that on closing/possession date the property is to be in the same condition as the day you viewed it. If it isn’t, there are remedies available to you to go after the seller. In a foreclosure/court ordered sale you don’t have that. For example if upon possession the toilets are gone from the home or there is damage done to the walls, there is no remedies as the home is sold “as is where is”.
No Real Property Report will be supplied. You can have one done once you have purchased the home to ensure that any decks, fences or garages aren’t encroaching on your neighbors’ property in case you want to sell the home at a later date.
If there is appliances in the home they will not be put in the offer as the seller doesn’t have the right to sell them, however if the appliances are in the home at the time of possession then they are yours.
Most sellers of a foreclosed/court ordered sale require an offer to be without conditions. Make sure you talk to your bank before submitting the offer.
These are a few of the differences in purchasing a foreclosure/court ordered sale. You need to have a good understanding, so make sure you have a talk with your realtor or lawyer.