While Marco Island has not had the high foreclosure rate that most of Florida has endured in recent years, we've certainly had our share. Satisfaction among buyers of these homes runs the gamut from ecstatic to heartbroken. There have been some great deals and a few nightmares, too.
Buying a Naples or Marco Island foreclosure is not for everyone. Most of us are not experienced in evaluating the structural integrity and systems of well-maintained homes not to mention those of a neglected or damaged property. The remedies and repairs necessary to foreclosures are almost always more complicated and more expensive then they appear to be.
If your foreclosure purchase doesn't work-out, there's no one to call. The risk is all yours as the buyer of one of these homes so, beware! I've put together 5 things to consider before you even think about buying a foreclosure. You may decide, after seeing a few foreclosures for yourself, that avoiding them altogether is the best bet.
1) Real estate investors have been aware of the home long before it hit your radar screen and they dismissed it. Investors are combing the market and aggressively pursuing distressed properties long before they become "bank-owned." Are you really smarter than a seasoned real estate investor? The home has already been rejected by a professional who thought that it was too expensive, too damaged, in the wrong area, or a million other reason. You may have the experts knowledge very soon if you buy what they rejected but that education may cost you a pretty penny.
2) Foreclosure homes are sold "as is". Usually, the home has just been sitting there deteriorating for a long time, sometimes several years. This neglect can do some serious damage to HVAC systems, water heaters, etc. Oftentimes, the previous tenants were upset with losing the property and did some damage like removing fixtures and destroying plumbing. Banks just sell homes. They don't maintain them and they don't fix them.
3) The house or condo may not be that great of a deal when it's all said and done. Just because a house is in foreclosure doesn't mean that it's selling at a huge discount to the market. Think about it: the bank wants to make back as much money as it can to offset their loss. Combine that with the fact that foreclosures get a lot of attention from buyers and great deals can get hard to find. If some repairs and rehab are going to be required, look out. You are following the recipe for disaster. Who hasn't had the costs of a project run higher than anticipated? If this happens on your foreclosure deal, you could find yourself up-side-down very quickly.
4) You can find a great deal without buying a foreclosure. This is probably the simplest and best reason to forget about foreclosure properties altogether. In this market, you can usually find a great house, at an unbelievable price, and it'll be ready for you to live in immediately. Plus, the owners are usually more motivated to make the sale go through than a disinterested bank officer that is backlogged with foreclosures.
Foreclosures are tempting. Some people have done well buy purchasing them. If you think you have the special skills and knowledge to pull it off, go for it. If you don't have the slills, stick with the tried and true. All of SWFL is selling at bargain prices. Finding a great deal is easy.