When you find a foreclosure listed for sale in Southwest Louisiana chances are you will find yourself jumping through hoops to submit and offer and more than likely there will be multiple offers. Buyers wishing to purchase a Lake Charles foreclosure need to know the good, the bad and the ugly when proceeding with an offer to purchase.
Many bank owned properties and foreclosures have been neglected and the prior owner may have left the property a mess. It is not uncommon to find an untidy mess when viewing foreclosed homes ! There could also be damage to the property with holes in sheetrock, broken windows or even a pool that looks more like the black lagoon. Some bank owned properties will actually remove appliances from the home and so there will be no stove or dishwasher and the home will be winterized with no utilities. Over the last 14 years as I have viewed foreclosed homes with buyers I can quickly sum up whether the buyer is going to make it to the closing table and we have a chance at making the deal work or not because there are so many obstacles to overcome.
So when and if the buyer decides to make an offer most all of the foreclosed properties have gone to on-line submission portals where the Realtor has to upload the offer with all the guidelines. Most of the sellers will not look at any offers submitted until the property has been listed 5-7 days and if you are an investor buyer your window for submitting an offer could be longer. You will require patience waiting on an answer from the bank. If multiple bids/offers are received the Seller will usually response with a “highest and best” offer counter. Should you be the lucky buyer who gets an accepted offer, the bank will then send their own addendums to be completed and you move on to the next phase of inspection.
The most recent inspection I did with a buyer, did not even have the electric meter on the house! We had to wait until it was installed to do our inspection in a short amount of time….7 days! Inspection is the buyers diligence period to test and inspect the house so you know what you are getting into. Air conditioning may have been neglected and not working properly, there could be water damage from roofing issues, mold, etc. the list just goes on. So all of a sudden the great deal you thought you were getting can quickly turn into a money pit of a deal when buyers start adding up the needed repairs.
There are lenders out there who offer re-hab loans and buyers may also opt for a bridge loans which is another option of financing to obtain cash to purchase the foreclosed property. However, even this option may not end up being viable because there is a 3 day recision period with bridge loans.
My most recent experience with a foreclosure involved a buyer obtaining a bridge loan. The house was a $300,000 property and in fairly good shape, just been neglected with routine maintenance. The buyers went through the bidding process and won out then proceeded with inspections. Roof, sewer, well and home inspections were all done and the Buyer was satisfied with the outcome. Everything halted when the Seller’s title company was made aware of the bridge loan / 3 day recision period and they would not accept that and insisted on same day funding of the loan. This was not possible, you cannot overcome lending regulations with the 3 day recision and so the entire deal just crumbled.
So to sum it up, foreclosures are not for the faint of heart. As a matter of fact don’t get your heart set on a property because you may be disappointed that you never make it to the closing table!