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How may we help you?
866-485-1056

994 Lake Oconee Parkway
Eatonton, GA 31024
706-485-1056
Fax 706 485 1057
minchey@plantationcable.net

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  Foreclosures

With a constantly changing inventory of Foreclosed Properties, it is impossible to provide an up-to-the-minute list of those currently available. Call for the latest additions, as well as a complete picture of the possibilities!

What You Need To Know About Buying a Foreclosure


Some of the best buys available in today's real estate market are foreclosures or Bank & Corporate owned properties (REO), but these deals can either be the easiest or the most difficult to bring to the closing table. No two are alike. There are several things you need to know and that you can do proactively to make this a worthwhile endeavor. Some of the most important are:

As-Is: All reo properties are sold "as-is". What that means varies from owner to owner, and can range from “We aren’t going to do anything” to “We’ll do what we must to meet building codes and get it sold”. What it always means is that minor repairs and cosmetics that would typically be fixed in a normal sale will not be addressed at all. Some major repairs, without which the home cannot be funded by a lender or insured, have a much better chance of being done.

Disclosure: No disclosure will be provided, nor will any previous disclosure from a previous, pre-foreclosure listing be provided. The corporate owners’ position is that they never lived in the property and have no idea of what may be wrong with it. That’s why they sell them as-is too. The idea of as-is and no disclosure is to limit the liability of the corporate owner. If something goes wrong later they want no part of it.

Warranty Deed: All foreclosures will be sold with a limited or special warranty deed. This provides full ownership but the seller doesn’t warrant any ownership prior to theirs. Consideration should be given to buyers’ title insurance. This is a one time payment that can provide additional peace of mind.

Inspections: It is always the responsibility of the buyer to order and pay for inspections, and a home inspection is even more vital in the case of a foreclosure. It can be the best money a potential buyer ever spends. It is one thing to know there was a roof leak. It’s another to find out that it has gone all the way into the foundation and created structural problems. A thorough inspection should be done within the due diligence period [see below], as well as a termite inspection. Any severe issues found can be either addressed contractually or the buyer can walk away from the contract within that due diligence period.

Due Diligence: It is always good for a buyer to ask for as much time within the due diligence period as they can get. This is a frequently negotiable point as the seller wants a rock solid contract as soon as possible. We recommend at least 10 days. Some sellers want to allow as little as five. Resist signing a contract that doesn’t provide enough time within the due diligence period for proper inspections.

Qualifications to Buy: This is a major point for corporate sellers, and frequently they do not allow listing agents to even present contracts without a firm commitment letter from a lender (rather than the usual pre-qualification letter) or a proof of funds [POF] letter from the buyers’ bank. Most sellers will be very firm on this requirement.

Earnest Money: This varies from seller to seller but most want sufficient deposit monies to show firm intent. Some sellers require a prescribed percentage of the offered purchase price, usually 1-2%. Some sellers also insist upon certified funds along with the requirement that the listing agents’ broker hold the money in their trust account.

Appraisals: All lenders will require an appraisal of the property. It is very important to add a stipulation to any offer for a foreclosure that states: “Contract is contingent upon appraisal being for full purchase price as stated in the contract” or words to that effect. This appraisal contingency should stand outside of the due diligence period, in other words, it does not need to be completed during the due diligence time.

Addendums: Almost all sellers have addenda to contracts that must be signed by the buyer BEFORE the seller will sign the actual contract. The language in these can be harsh and the addendums can run from one page to the 52 page monster that we recently saw. The main thing to remember here is that the seller will honor the terms of the contract but they won’t sell the property without the signed addendum.

Response Time: Unlike non-foreclosure sales, expect a longer than usual response time to your offer. The property may be owned by a foreign bank, a major national one, or a government entity such as Fannie Mae or Freddie Mac, and the paperwork must travel through layers of asset managers in order to get an appropriate approval. There are times that this process can literally take weeks to get an answer. Often, in the case of multiple offers, the seller may respond with a request for ‘highest & best’ offers and the process starts again. This can be frustrating, but good things come to those who wait.