Yes, foreclosure rates across the country continue to drop and that is a good thing and a sign that our economy is continuing to stabilize. Kalamazoo area home buyers should note that there still remain a number of bank owned properties and short sales in the greater Kalamazoo area. According to the National Association of REALTORS®, distressed homes accounted for 24% of national December sales; a large proportion, but significantly down from the 32% of just a year ago. Foreclosure property is also known as “real estate owned” (or REO) property.
The other thing that it is important to note in the Kalamazoo home buying market is that REO properties are not the only properties you should be searching for if you are looking for a new home. It is wise to do a comprehensive search of ALL properties that are for sale in the price point that you are looking in. The Veenstra Team offers a free, no obligation service to home buyers that simplifies the process of finding the right home….and this includes foreclosures, short sales and typical transactions. Give us a call and we can email you every time a new home comes on the market that matches your wish list!
Now, back to foreclosures…..If you do happen to find a foreclosure to it’s good to bear in mind some key differences between buying regular homes and bank owned properties. To make an REO purchase successful, potential buyers need to plan for those special factors.
- Count on bank owned properties being more difficult to finance due to guidelines set by lenders: requirements that can prevent REO purchases from going through. Due to a property’s condition (which can sometimes be poor, even non-habitable), FHA and VA-approved buyers must gain pre-approval before submitting an offer.
- Bank owned properties are generally sold “as-is”, often with fewer disclosure requirements. We always urge our buyers to be diligent about pre-purchase inspections – and with REOs, it’s doubly important. Purchasers of bank owned properties can have little or no recourse if defects or maintenance issues are discovered later.
- Lenders can run into additional costs when selling REOs — costs involving liens, evictions, property taxes, insurance, etc. In addition, banks may charge additional fees for extended closing and other services.
All of which goes to the point of how buying bank-owed properties in town differs from run-of-the-mill home purchases…and why having a real estate agent well-versed in both traditional sales and bank owned properties is so important. If you would like a look at the housing options currently available us a call today, let us make your home purchasing process as smooth as possible!