Four Things to Know Before Buying San Diego Foreclosures

For some, buying a San Diego REO (a San Diego bank-owned foreclosure property) is a viable option. Others may want to stay away from purchasing a San Diego foreclosure listing. Here are four things every buyer must know before buying a San Diego foreclosure.

1. Buying a Home As-Is

When you buy a San Diego bank-owned foreclosure property, you need to know that banks are typically quite serious about selling a property in its current condition, or as-is. This means that, although you can certainly ask the bank to pay for repairs, the bank is already telling you up-front that it will not complete or pay for any repairs. What you see is what you get. 

What condition can you expect a San Diego foreclosure listing to be in? You name it, we've seen it! Some foreclosure listings are in terrible condition (cracked slabs, leaking roofs, termite-infested, bad plumbing, bad odors, ruined flooring, etc.). Some simply need some new flooring, paint, and appliances. Others have already been cleaned and fixed-up by the bank - at least to some extent. If you are considering looking at San Diego foreclosures for sale, you should have already considered the fact that you may need to put some work into your new home. You should also determine how much it's going to cost you in repairs before you write an offer to purchase a San Diego foreclosure.

2. No Disclosures

When you're buying a San Diego foreclosure property, you need to know that the bank is disclosure-exempt. California law requires that a seller fill out a Transfer Disclosure Statement (TDS) in all residential real estate transactions. The TDS offers great protection to San Diego home buyers. There are many questions that the seller answers on the TDS that a buyer would want to know about the property before making the final buying decision. In fact, it has been argued that a seller must disclose anything that may affect the value of the property in the buyer's mind (view a sample of the Transfer Disclosure Statement).

If you plan to move forward with a purchase of a San Diego foreclosure property, you must do so with the understanding that you are giving up some of your California home buyer rights. Your research and inspection of the property become that much more critical when you purchase a San Diego foreclosure. Be sure to hire a licensed property inspector, and leave no stone unturned.

3. Bank Contracts and Addendums

Normally, when you purchase real estate for sale in San Diego, your purchase contract would be written up using the California Association of REALTORS® residental purchase agreement (RPA). Globella's San Diego exclusive buyer agents make it their business to know the RPA and to know how to protect the best interests of Globella's buyer clients with this contract. When you buy a foreclosure in San Diego, you need to be prepared to see new contracts and/or new addendums that are foreign to anything you or your agent have seen before. Banks have been known to use their own contracts or addendums to change many important parts of the purchase agreement.

Globella advises each client who purchases a San Diego foreclosure property to review the purchase agreement and addendums with a licensed real estate attorney. Our goal is for you to be protected, and a real estate agent is not qualified to offer legal advice. As your advisor, we will help you find the answers to all of the important questions that come up throughout your San Diego foreclosure purchase.

4. Patience

If you've made it this far and are still open to looking at San Diego foreclosures for sale, then this last point may seem elementary to you. However, it's still important to understand. As a buyer of a San Diego foreclosure property, your patience is going to be tested. You are not dealing with a typical seller. You're dealing with an institution, and everything is going to take longer than normal.

When you submit your offer, you could normally expect a response within three days, but with a bank-owned foreclosure it may take a week or two. If your offer is accepted, you may need to wait another week or two until the seller actually signs the contract. This can be frustrating to deal with, but not if you already know what to expect. Globella's San Diego exclusive buyer agents are experts at helping you navigate through your San Diego real estate transaction, and we will be there for you every step of the way.

Naturally, there is a lot more to know about San Diego foreclosures, but these four issues are a good starting point. Some of our clients purchase San Diego foreclosures. Others instruct us not to show them any foreclosures. Our job is to provide you with all the information you need to make a decision. We'll never tell you what to do, because you're the boss. However, you can count on our years of experience and our specialty of helping buyers-only to provide wise counsel throughout your San Diego real estate purchase.

See Also: FAQ: What is an REO? REO Definition

See Also: FAQ: How long does it take to buy an REO property in San Diego?

See Also: San Diego Short Sale Guide for Buyers Only

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Justin Gramm is the founder and principal broker of Globella Buyers Realty, your San Diego Exclusive Buyer Brokerage. He also writes a blog, "For San Diego Home Buyers."

Exclusive Buyer Agents do not list homes for sale and never represent sellers. They have no "inventory" to try to sell you. They can represent you in purchasing any home. They are specialists at representing buyers only on the buyers' side of the transaction. Exclusive Buyer Agents work to get buyers the best price and terms when they buy a home.

If you have excellent credit and plan to buy a home or condo in San Diego County within 90 days, contact Justin Gramm to hire an agent on your side of the transaction. Call Justin at (858) 437-2662 or  E-mail.

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