Banks Pricing Foreclosures Incorrectly

There is a conventional wisdom that indicates that if you buy a foreclosed house or property you're probably going to get a better deal from the bank. that is not however always the case. The bank has an advantage with a foreclosed property as they don't dicker or negotiate on anything. This means they can go blindly into a property and assess the value partially based in their book you and they don't have to discounted for the things that a normal property owner would have to discounted property for such as structural flaws or serious problems with the property. The bank can claim ignorance and therefore price the property higher than it normally would list for right from start.

I was searching for beufort nc real estate this last weekend and ran across a great example of this. We looked at in a frame house on the lake that had a little bit of fixer-upper potential. However the bank, Wells Fargo, had listed the property at an amount that didn't seem to include the discounts that should be applied to to the probability that the garage was actually constructed on the property line and therefore needed to be torn down because it wasn't built according to zoning and the distinct likelihood that another edition was added to the house at one time they didn't have a permit to potentially.

Now the bank is in on the hook to prove that there is a permit for the addition nor are they on the hook to prove that the crowd was built within zoning, but they do get the benefit of listing the house at a price comparable to other houses of similar sizes with garages and with that extra square footage that the addition provides the house.

So a prospective buyer like yours truly can go in and look at the house and see the potential and make an offer on it but at the end of the day yours truly would be stuck holding the bag if the garage had to be deconstructed and the addition removed without any recourse to put those portions of the building back up again because there is a room on the property for them. In essence banks selling foreclosed property can plead ignorance like that and walk away with an inflated price when the buyer or suspects a deflated discounted price.

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