Familiarizing yourself with what is involved with buying a Sarasota foreclosure will give you an advantage.
Here are some common issues you will face when looking at foreclosure property:
- The sale will be as-is, meaning the bank will make no repairs to the property. You have the right to
inspect for major structural issues. If such things as termite or water damage affecting the structure
are discovered, you have the right to amend or withdraw your offer;
- Usually, most if not all of the appliances are taken from the property. Appliances are considered
personal property, not real property;
- The property has likely not been lived in for quite some time. Be prepared to make some repairs;
- In some situations, the interior may be stripped of wiring, heating and air systems, kitchens, and bath
- You may be required to pay past due homeowner association fees and property taxes. In practice,
very rarely does the buyer need to pay any liens or past due fees or utilities;
- You may need to do so much repair work to the property that you will need to receive a Certificate of
Occupancy, to be able to live in the property or get tenants;
- Arrange your financing in advance. If you plan to mortgage your property, you absolutely must have a
mortgage approval letter from your lender that will accompany your offer. For cash buyers, you must
have proof of funds that is no older than 30 days. A printed online bank statement is usually
sufficient. This too will be submitted with your offer;
- Be prepared to close quickly. Cash buyers should offer a 2-3 week closing date, especially in
multiple-offer situations, as an incentive for the bank to consider your offer above others.
You can also learn about the Florida Homestead Exemption and how it will affect your property taxes.
Foreclosures can be an incredible purchase, if you are well informed on repair costs, market values, and
have the necessary funding ready to go at a moment's notice. I especially enjoy identifying properties that are
In the current market, you may have heard about the Bank of America/Countrywide Mortgage title fiasco. In
short, home owners who lost their homes to B of A, which assumed their mortgages when Countrywide
Bank folded, filed suit, claiming B of A had no legal right to foreclose due to issues with title. If you are
considering purchasing a foreclosure property, read more about Marketable vs Insurable Title on my blog.
I have always said an educated customer is my best customer. My website is one of the few that has blank
copies of the most commonly used documents for buying or selling real estate in Florida.
I highly recommend that you read the Florida residential purchase and sale contracts in the Document
Center before your visit, to make sure your questions about buying property in Florida are thoroughly
You should be prepared for multiple offer situations on Sarasota foreclosure properties under $150,000 that
are in good condition, and make your highest and best offer up front.
Some home buyers I have spoken with are under the misconception that you can get a good deal on a
foreclosure by making a lowball offer off the list price. In reality, when it comes to foreclosures, most banks
do not include the word "negotiate" in marketing their properties for sale.
The bank owner has no obligation under FL real estate law to make a counter-offer, and they will most often
select the offer that is the highest price with the best terms. In most cases, if your budget is $200,000, you
should not expect a low offer on a $300,000 foreclosure to be accepted.
The majority of foreclosure properties are slightly underpriced to generate immediate offers and to
encourage a bidding war. The "deal" a savvy buyer can expect is the purchase of a property that is one-third
to one-half off what that property sold for at the height of the real estate market.
Does it seem like the banks are in control when selling foreclosures? Absolutely. It helps to remember
someone's loss is your gain. If your attitude is "I won't pay list price for a foreclosure", it's quite likely you will
be watching from the sidelines as prices increase.
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