My Foreclosure Purchase
Posted by Rebecca
About a month ago, my husband Rob and I bought a foreclosure as our primary residence. We were living in a small but comfortable condo at the time and weren’t in a huge hurry to move, but we’d been keeping a casual eye on a few neighborhoods on Wilmington Island. We liked one island neighborhood in particular and were riding through when we noticed the home. 
Being a Realtor, I’d seen the listing online already, knew it was a foreclosure, but for some reason had it in my head that we wouldn’t be interested in it. Since it was vacant and on lock box, we decided to check it out anyway and were pleasantly surprised at the interior.
It had the same floor plan of a home I’d fallen in love with months back, but it was much larger since the builder had added 2 bedrooms, a full bath and a large main room in the elevated daylight basement. In addition, the home had many upgrades and backed up to a lovely little sliver of saltwater marsh, but you can check out the pictures for more info. on the house itself.
I took a few pictures with my trusty BlackBerry, then we headed home to look at numbers. The listing price was very low for a home of its size, and the tax assessor value was higher than the list price as well (tax assessor values are usually on the low end - often a good bit lower than a home’s real value). I put in a call to the listing Realtor, who told me that 3 offers had already been submitted and that the bank would be accepting one of those offers later today. He said that I was too late.
Just for fun, I sent the pictures I had taken to my mom. She and my dad called me within a few minutes, saying what a wonderful house it was. I thought so, and Rob thought so, but after hearing it from two more people, I decided to give the listing Realtor another call. I asked him what would happen if I submitted an offer in the next hour. He said he’d have to put in a call to the manager at the bank, but he’d call me right back. He called back to say that if Rob and I submitted an offer within the next 3 hours, the bank would look at it along with the others. But we had to go through the pre-approval process with that particular bank’s mortgage department before the offer could be submitted.
Rob is definitely a look-before-you-leap kind of person, and this was all moving WAY to fast for him. It was a little scary for me too, but I’m used to flying through life by the seat of my pants. We thought about it, ran some numbers and decided to put in a bid. The race was on. Three hours to get it all done! We offered a good bit higher than the asking price, knowing that this would still be far below the home’s value, then we did all we could - hold our breath.
Two days later, the listing realtor called to say we’d won the bid! Now comes buyer’s remorse. "Did we bid too high? Maybe we should have asked the bank to pay closing costs…what if the house has termites? Those beautiful soaring ceilings will cause our electric bill to be sky-high." And on and on it went, and we hadn’t even started the inspection process yet!
Tips Gleaned Thus Far for Buying a Foreclosure:
- Know the areas where you would be willing to buy a home, either as an investment property or as a primary residence, then watch the market in those neighborhoods.
- Know the prices of homes in those neighborhoods and have an idea of what you’d be willing to pay for a home in those areas. Be aware of which features may add or subtract value from a home. (Your Realtor is a great resource here, as she looks at homes almost every day and knows what buyers are willing to pay more for).
- Don’t overlook a home based on incomplete information. In our case, had we not looked at the house "just for the heck of it," we’d have missed out.
- Don’t let someone tell you it’s too late or that it’s not doable. Nothing is final until paperwork has been signed and money has changed hands. If you feel insecure about the situation, get a trusted second opinion.
- Have a working relationship with a mortgage lender. Know what you can afford, and have a preapproval letter to present to sellers along with your offer.
- Buyers remorse/panic is normal - this happens to everyone after a decision this large. But be sure to investigate any issues that cause you unrest so that you can be sure that they are just a symptom of cold feet and not real issues. This is another great time for a trusted second opinion.
Check back for the rest of the story including the inspection process, closing and renovations.
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