if you are considering buying real estate in Virginia Beach, VA please rethink bank owned properties.

We are all suffering because of the lender’s no doc, no pay, no nothing required sub-prime and other mortgage loans.  Now read about bank owned properties and how they want you to accept their crap real estate in Virginia Beach and Hampton Roads and you absorb all the risk.  

I was recently working with a client who was interested in Virginia Beach bank owned real estate.  He thought there was great deals available and these properties would only maybe need some paint, carpet, and cleaning.  I explained that most likely, whomever the previous owner, they probably did not take the best care of the home. 

Nevertheless, in my quest to always please clients we embarked on a tour of these Virginia Beach real estate properties.  Boy, what this an eye opener for him.

Above I described these homes as crap.   That is putting it politically correct.  There was obviously no “home care or maintenance test” given before approving these owners mortgages.

Now the real irony in all of this are the owners of the real estate - banks or financial institutions.  They list these homes with local REALTORS® which is good, but put rediculous restrictions on the potential buyer making it extremely difficult to recommend purchase, much more get a mortgage. 

It seriously bothers my personal and professional ethics.  

Whomever thought up “As Is” is someone I hope to never meet.  “As Is” simply means the bank disclaims any liability or they dont care.  Both are appropriate in most cases.  “As Is” might be ok if the house was rather new.  “As Is” probably does not work well with roofs leaking, a/c units rusting away, windows that are difficult to open if at all, plumbing leaks, electrical faults, the oven is dead, and much more.

Can you imagine in this market and area buying Virginia Beach or Hampton Roads real estate with no termite/moisture or home inspection (oh I forgot, you can have a home inspection for Informational purposes which just confirms your worst fears - that will really help you - right?). 

Try this scenario; let’s see, go to your bank and tell them you want a mortgage to buy this property but no termite or moisture inspection is allowed.  They will laugh you out the front door and jack your credit card rate to 30% for being stupid. 

Here is my solution for bank owned real estate:

    1.  Banks make the necessary repairs to vital items such as termite/moisture/plumbing/electrical, and consider the safety issues reported in home inspection reports. At least then real estate buyers have some sense they will be safe in their home. You might even get a few more dollars for the home. I know, there are rehab loans available for some buyers, la-da-da-da-da.

    2.  Banks dump the real estate properties for a discount to contractors, Ugly House People, or flippers who will buy them in disrepair knowing they can fix and make a profit. This wont happen because most of those people are greedy.  Predatory home buyers would have already owned the real estate had any equity existed and they could have absconded such. 

So, in summary, do your due diligence when considering bank owned properties.  As REALTORS® we are obligated to “disclose” everything we know and suggest clients get professional advice on anything questionable or out of our expertise area(s).  The problem is most first time home buyers do not have the money for repairs or other costly items.  Most of these homes are not bargains compared with the investment required to make them habitable, especially if you are not handy with home repair. 

Furthermore, there is enough quality real estate for sale in Virginia Beach and Hampton Roads that does not cost substantially more and offers all the consumer protection that you deserve.   Consider those properties even if it means waiting awhile to accumulate more savings or see if a good bargains comes about. 

Unless you are a real estate investor or flipper, you might want to stay away from these homes in Virginia Beach or elsewhere. 

If you are searching for Normal Real Estate please contact me.

See why you may want to contact me and the value your Virginia Beach REALTOR® can provide during this process. 

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