According to a recent article by Haward Pankratz in the Denver Post, over 165,000 home owners had called the Colorado foreclosure hotline by early 2013, all seeking to avoid foreclosure on their properties. Colorado Attorney General John Suthers weighed in, highlighting the extent of the foreclosure trend in the state and emphasizing the need for the hotline—
“if we plan to continue the trajectory of decreasing the rate of Colorado foreclosures and educating homeowners about their options early in the foreclosure process.”
Luxury homes are not immune to the foreclosure problem. People across the socioeconomic spectrum encounter financial problems—that’s unfortunate for them, but it could be good news for buyers in the luxury home market looking to find a good deal. What luxury home buyers need to know, however, is that there can be hidden risks to buying a foreclosed property, the kinds of risks you need a competent Realtor to sort out.
Homes Left Vacant Tend to Deteriorate
It’s not unusual for foreclosed homes – even beautiful homes in fantastic neighborhoods – to stay vacant for many months, or even years, once the prior owners have moved out. In most instances, no one is performing regular maintenance. In the absence of heating and air conditioning, vacant homes suffer deterioration resulting from the seasonal temperature swings in the Denver area. Equally troubling, a vacant house is an easy target for vandals and for thieves, who look for these properties to steal anything they can, from copper pipes to air conditioning units to furnace heating coils.
In order to make an informed decision and a reasonable offer, it’s important for buyers to perform a thorough inspection of the property, getting “into the weeds” to spot any signs of damage or deterioration.
Going It Alone with Banks Can Be Risky
Banks are in the business of selling foreclosed properties. In most cases, they know much more about the process than potential buyers and leverage that superior knowledge to their advantage. For example, they can include provisions which make it extremely difficult for the buyer to enforce the contract. They could include a provision which permits them to pull out of the contract prior to the actual sale for almost any reason (in most cases because they received a better offer). Buyers, unless they’re working with an experienced Denver Realtor, have no such leverage when it comes to included provisions, or with regard to the closing date, which they can’t amend, but which a bank will strictly enforce.
Does This Mean Buyers Should Avoid Denver Luxury Home Foreclosures?
Not at all. You can still get an excellent deal on a foreclosed property, provided you work with professionals who will ensure you’re buying what you think you are and for the best price possible. An experienced Realtor will take the time to guide you through the process from showing to closing, be there to answer your questions and address your concerns, make sure your rights are protected, and ensure that you are paying a fair price.