Buying a Foreclosed Home
Purchasing a foreclosed home (or REO) can be very cost-effective, but there are considerations you need to make if you’re buying a foreclosure property:
- You will make an offer to purchase using a standard Arizona Purchase Offer form, but the bank is likely to counter with their own, very specific contract.
- When you make an offer, it usually takes the bank 3-7 days to respond to you, so be prepared to wait a little longer than usual for a response.
- If the utilities (electric, gas, water) were not on when you visited the property, it is unlikely the bank will turn them on for you to do a home inspection. You will be responsible for turning the utilities on for any inspections you do (and to pay for the cost).
- Foreclosed homes are sold in 'As Is' condition—meaning the bank will not make any repairs.
- The bank may occasionally agree to replace missing items (air conditioning condenser, range, etc.), but don’t count on it—this is dependent on each individual bank. Our agents have worked with most of these banks, and can probably give you a good idea whether the current bank/owner has been willing to replace items in the past.
- Banks will generally not provide you with a Seller Property Disclosure to explain any repairs made to the property, since they have never lived in the house.
- Banks will usually not provide you with lead-based paint information for the same reason.
- If the property has a septic or alternative waste treatment system, the bank will provide only limited inspection/certification and transfer funds.
- Many banks want a closing as soon as possible, so the time you have available to finalize your loan and make your plans to move may be shorter than normal. Most banks want to close within 30 days.