Whiteboard Topics: Where Can I Find Foreclosed Homes on a Lake

A foreclosed home on the lake is a rare find. Lake Homes Realty’s CEO, Glenn Phillips shares why your search for one is coming up short.

LakeHomes.com, MLSs, & Other Websites: While homes like these are available on sites like LakeHomes.com, you may have trouble finding them because of how few there are.

Why So Few?

  1. Not the 2008 Market: While inventory spiked during the recession, this was not the case for lake properties. This is because lake homeowners are more financially sound than the average buyer.
  2. Interest Rates Affecting Sellers: Lake homeowners that have a mortgage don’t want to battle with increasing interest rates when buying a new home.
  3. Lenders are Well Positioned: Due to past real estate crises, lenders have policies in place to ensure they work with stable buyers.
  4. Majority Do Not Have a Mortgage: More lake home buyers paying in cash means fewer mortgages and fewer foreclosures. 

If you still have your heart set on a foreclosed home, LakeHomes.com will have the few left available!

Whiteboard Topics: Busting 3 Myths About Lake House Foreclosure

Buying a foreclosed home may sound like a great idea in theory, but the process may not turn out the way you expected. Lake Homes Realty’s CEO, Glenn Phillips, busts three myths about lake home foreclosures to help settle your expectations.

  1. You can “Get a Deal”: With the market at an all-time high, foreclosed homes won’t be selling as low as they would if the market was down. Banks may even turn a profit after listing a foreclosed home because of the demand for property.
  2. Foreclosures are Up!: Foreclosures may be common in other real estate sectors, but it’s rare to see them at the lake. The general population that owns lake homes is older and more financially stable.
  3. Banks Will Discount Foreclosures: Again the demand for lake property is so high right now, that banks don’t need to discount foreclosed homes. The home market is not crashing, and as we mentioned, banks could likely make a profit off the homes they have in their possession.

You know what they say: if it sounds too good to be true, it’s usually because it is. Before you begin your lake home foreclosure search, you need to know the truth about these properties!

What You Need to Know About Buying a Foreclosure

Even though the economy is improving overall, there are still pockets of financial difficulty in many areas around the country.

While this may mean you can score a good deal on a home, it also comes with its own share of potential issues.

There are several things you should keep in mind when looking at the types of foreclosed homes you can purchase. These include how the purchasing process will work and the potential downsides to purchasing a foreclosed home.

There are a few kinds of foreclosures you can buy. A pre-foreclosure home is one where the homeowner still owns the house, but is just a few weeks away from foreclosure. A real estate owned property is one where the bank or other lending institution has seized the home as an asset, and an auction home is one where the bank is selling the home to potential buyers.Auction for foreclosure

There is always the potential to find a really good deal on a home at auction, but you will be bidding against others and the competition might be fierce.

When you are ready to buy a foreclosed home, you can start your search on the internet looking for homes in a given area, or look through public records for foreclosed homes.  You could also contact an agent, who can also help you find homes that are foreclosed in your area.

The bank that holds the property will often ask for a pre-approval letter from your bank. This is to make sure you have the funds and are able to buy. As they have just had to foreclose on the property, they want to make sure the same thing will not happen with your purchase.

On the downside, there are some things to keep in mind:

  • You will not be dealing with the former homeowner at all in the process, only the bank that is now trying to sell the home.
  • You may feel a bit rushed by the bank, who wants to sell the home and recoup its losses as soon as possible.
  • You might also not hear back from the bank for a few days after you have made an offer while they crunch the numbers of the offer. This can be frustrating if you are wanting to move quickly.
  • There is no expectation of a disclosure of any issues with the house.  You will have to do the leg work yourself, contacting the county or city planning department to pull records and to look over all of the paperwork carefully. Or, you can hire a good title insurer to make sure your title is clear. You’ll need to rely on your agent to tell you about the schools in the area, when the rush hour actually is, and what other things you should know about the neighborhood.
  • Depending on how angry the previous owners were about losing their home, you may find that they destroyed parts of the house on the way out, or they decided to take the fixtures with them as they left. Because there is no disclosure process, anything that you find inside you will be responsible for repairing.  You do have the right to have an inspection done, so you can at least be prepared.

It can be a bit of an adventure buying a foreclosed home, but it can also end up saving you a good deal on a very nice home.  If you do your homework ahead of time and have your financing lined up ready to go, you can be in your new home, lakeside or not, in short order.