The National Association of REALTORS released its 2011 Profile of Home Buyers and Sellers and there is some interesting information in it.
45% of the buyers who responded to the survey said that they did not even consider purchasing a foreclosure when they looked for their home.
Although the survey didn’t ask respondents for reasons, purchasing a foreclosed property can be a frustrating process. With a typical real estate purchase, you submit an offer and within 24 hours the seller responds. If you are buying a foreclosure, receiving an answer in a week is a fast turn around for a bank and waiting up to a month to get a response is not unusual. Foreclosures are sold in “as is” condition meaning that you have the right to have a home inspection, but if you aren’t happy with the results, your only recourse is to back out of purchasing the house.
I’ve seen banks do some pretty illogical things, too. In one recent sale, it took the bank 6 weeks to have the house dewinterized for the home inspection. Then they said if the closing didn’t happen by the end of the month (which was 3 weeks away), they were going to put the property back on the market. They were the ones that had caused the delay! Even their attorney told them it was irrational.
The moral of the story is that you can get a good deal buying a foreclosed home but you need to have patience and fortitude and be prepared for frustration as you go through the process.