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Buyer beware. Do careful research. Every foreclosed home that I've seen has been neglected. if the Bank does fix them up, they usually just do cosmetic fixes and leave big problems to the next owner. They use a lot of unlicensed (inexperienced) contractors to do work to save money. Get a very thorough home inspection by a licensed Home Inspector. Make sure he has sophisticated moisture investigation equipment. Moisture and humidity is a huge issue in Florida. Check his license at the Florida Department of Business and Regulation website. If he was also licensed as a Mold Assessor, he could then also collect mold samples if he found moisture problems. Go down to the City Hall and ask for permit records of work that was performed at the house. Permit information doesn't always show up on County Property records. If the seller can't give you permit information, that's a red flag. Ask the City Hall for their map of all properties who have filed SINK HOLE claims. Sink holes are a big issue in many parts of Florida. Be sure that the title is CLEAR of all liens. If you don't do a proper title search, you could be buying a home that has a second mortgage that wasn't disclosed and you could end up paying that second mortgage along with your mortgage on the house. Choose a realtor that will help you with all this. Hire professionals who are willing to spend a lot of time answering your questions. Make sure you get the Seller's Disclosures asap, and negotiate the longest inspection period possible, like 30 days. Hope this helps.
In Tampa Bay when a property is foreclosed it is first auctioned online by the County Clerk to ALL CASH buyers. Most properties will have a final judgement amount owed that exceeds the full market value so unless the foreclosing lender allows it to sell below the judgement amount it will go back to the lender. Banks/lenders do not typically sell directly so they'll hire a local realtor to list the property for sale. Some foreclosed homes will be restricted to buyers that intend to occupy as their primary residence. So unless you're able to pay with ALL CASH and be willing to do a lot of research before bidding then you will need to line up with the many, many buyers looking for a bargain. Most properties are receiving multiple offers at prices above what a property may appraise for. The days of getting a 10% immediate return on a rental property are over...unless you also factor in the appreciation of the asset. Last year we experienced a 14% rise in values.
Hi Leslie - buying a foreclosed home is similar to buying a home in the traditional sense, except: the seller is the bank, there is little to no room for negotiation, foreclosures usually sell for slightly more than listing price (versus traditional sale homes that usually sell for slightly less than listing price), and foreclosed homes sell "as-is" which means no updates will be made to them. You would work with a local Realtor (I am one, so let me know if you need assistance) who would show you properties and, once you're ready to put in an offer, they'll fill out the paperwork for you.