Anthony Pierpont Foreclosure

 Purchasing a foreclosure

During my colorful and extensive career in real estate and finance I have seen some amazing things happen in the housing industry. On the front lines and in the trenches of the housing market I have been blessed to have survived and rebounded where others have ran and quit.

The housing market in 2004-2006 became over heated in value due to increased demand and loose lending guidelines. When the housing market began to collapse in 2008 we saw a rapid increase in foreclosures and banks taking properties back. As value went down home owners by the millions strategically defaulted and let their properties go.

Home owners did not want to keep making payments on an asset that was sinking in value.

Banks were bailed out by the taxpayers and government but they failed to modify home owners mortgages and the rate of foreclosure shot up to record levels. Most of this problem could have been avoided if banks had taken the initiative to lower every ones interest rates and made homes more affordable during the this great recession.

Each bank developed its own set of protocols for handling the foreclosure process and each state has it own set of laws that govern the procedure.

Once a bank has taken possession of a home their asset managers determined the value and then proceed with the sale of the property. Some banks put money into repairs, paint and flooring but most sell the property “As is” giving the buyer all the risk when purchasing one of these homes.

I have successfully completed the purchase of numerous foreclosure purchases but the buyers must be aware of the following potential problems.

1. A buyer is purchasing these homes “As is” . The seller will fix nothing found in the inspection or appraisal.

2. A traditional sale is much safer because seller signs an extensive and lengthy seller disclosure which can be used in court or arbitration. Traditional sales reduce the risk of “Money Pit” issues that could diminish and decimate the financial reserves of a home owner.

3. Banks selling homes have left properties with gas leaks, water pipe ruptures, mold and property leans and assessments that I have seen not disclosed and are discovered at the buyers expense.

4. Some banks will require buyers to pay for de-winterization of the subject property so they can properly inspect the home they want to purchase and also burden the buyer and agent with a lot more stress and paperwork not involved with transitional sales.

My worst experiences with foreclosures was in 2014 when I encountered numerous gas leaks in a home that should have been condemned. Another home we discovered that most of the water pipes inside the walls had all ruptured and would have cost close to $15,000.00 dollars to repair!

One of the worst experiences occurred after my buyer and I had spent a lot of time and money on paperwork and inspections only to find out after title work that the Town home had a $38,000.00 dollars worth special assessments (liens) on it from issues with a roofing company!

In conclusion I only recommend foreclosure purchases for those with a sense of adventure and deep pockets. To me the risk is not worth the reward and home buyers are far better off purchasing a property from people who took care of their home and took pride in its ownership.

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