I have listed and sold quite a few of the foreclosures in my day, and here are just a few helpful hints for the hearty soul looking to cut their teeth on this wonderful circus

1.  Are you paying cash or are you financing this deal?  Your loan officer may be extremely conservative, or at the other end of the extreme, just eager to get that next deal and not really care very much about whether your deal is likely to go through.  Financing rough properties with FHA loans is, well, tough.  Is there any mildew that an

appraiser could think is a dangerous mold?  Is there a working stove?  Is all the TRIM there?  You had better hope so, because any of this is out of place, you are in trouble when that appraisal comes back.  First-time homebuyers often are drawn to the foreclosures because they don’t know how much it will actually cost to fix these places and are unaware of the problems that will be encountered in escrow.  I had one deal where the cooperating agent (working with the buyer but not representing them) had advised the buyer to give their landlord notice, only to find out that there were numerous issues from an appraisal standpoint.  A lot of times in this market, cash buyers think that they have all the power, and put in low offers, only to get beat out by the deal that is financed and higher in dollar amount.  Many times banks don’t care about the cash deal as much as they should, and that brings me to another thing to look for:

2.  Who is the bank?  This is important!  Some banks are easy to work with, and some are definitely not!  Hopefully your agent has explained to you that many banks do not respond in a timely manner.  But it seems that no matter how convincing I try to be of this fact, people just forget, and get upset at the bank when often times it is not their fault.  Here’s why:  Buyer, buyers agent, listing agent, foreclosure coordinator at our company, asset management company, 123 asset holdings llc (holding debt in portfolio), and finally, john smith who ACTUALLY owns the property.

3.  What is it really going to cost to fix?  Many of the problems are going to be moisture related, especially in the northeast.  Once the heat has been turned off, these places get pretty musty, damp, and stagnant.  The buyers tell me, “it looked a lot better in the pictures.”  This is common for the real estate practitioner.

4.  Is all the work going to be worth it?  Even if you are successful with all of your rehabbing (if needed), does the location and future market value warrant all that hard work?  This is always a question you need to ask yourself.

Good luck, and happy hunting!