Most of the time when a Bank forecloses on a property, the property in
question ends up being listed and sold like any other property on the
market. So as you look through the listings you may very well be
seeing lender owned properties. The Wickenburg area does not see
too many Foreclosed properties because most of our buyers our coming in
with large down payments or all cash. If you are going
to find foreclosed properties then they will most likely be in the lower
price ranges where the working class, and first time buyers are
shopping. To put a number on it I would say $275,000 or less in
How much can I save?
There is a common misconception that you can buy a foreclosed property
much cheaper than the market value, but that is not usually the reality.
The lender does not want to keep the property long, but that does not
mean they will give it away either. The lender's want to get as
much for the property as they can just like anyone else. The
biggest difference with a lender owned property is that they won't sit
on it for a long period of time. Generally speaking a lender will
continue to drop the price of their listing until it generates a sale.
Many people come to lender owned properties with low ball offers, but
the result is almost always the same with the offer being rejected, or
sometimes countered. In my experience the lender will
probably not come down more than about 5% to 8% off their asking price.
How far they come down is influenced by time on the market, and interest
level. So a lender owned property will sell under market value,
but you could just as easily find an equally good deal down the street
with a conventional seller.
What is the risk?
There are a few differences purchasing a lender owned
property versus a conventional seller. The primary difference is
that the seller/lender will not disclose any information about the
property, and will not be held liable for any problems related to the
property. A conventional seller is obligated to disclose any important
facts about the property and could be held liable if they try to hide
anything. The lender owned properties are sold "as-is" and careful
investigation is advisable. The lender / seller will also be
very specific about the terms of escrow most likely dictating the Title
company used, the length of escrow and the length of the inspection
period, and will almost never consider a contingency.
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