By Greg Essink, Nebraska Home Sales REALTOR®

We have all seen the ads on TV or heard them on the radio proclaiming the “Good Deal” that foreclosures are, but are they? Well, the answer is yes and the answer is no. Foreclosure properties can be a deal on the surface but you need to dig a little deeper to get the whole story. Buyers generally think that a foreclosure property price is based on what the outstanding balance for the mortgage but that fact has little to no impact on what the property’s listed price.

When selling a foreclosure property the banks usually get a minimum of two opinions of its current value, one from an appraiser and one from a real estate agent. Both will look at comparative sales and comparable active listings and come up with what they believe is fair market value or what they believe the property will sell for on the open market. Many factors go into the value of a property, but in our market, condition drives price.

You may see a property for sale that you think should be worth $150k but only listed for $100k and think this must be a good deal. The story, once you get to the property, will likely change and sometimes drastically. New carpet, fresh paint on both the interior and exterior, carpentry work, and appliances are needed to get this “deal” property up to your standards. Another point that the typical buyer also needs to remember is that if they are going to be using many of the federally backed loan programs, such as an FHA loan, properties that have condition issues will likely not qualify for financing.

While there may be good deals out there, using the help of a seasoned Nebraska Home Sales agent will help you in your search in getting the property that meets your expectations and save you some time in the process.