So, you want to buy a foreclosure?

I was with a buyer last week that wanted to look at a certain foreclosure home that they had seen listed. The price seemed a little high, but they thought there might be room for the bank to wiggle... It had been on the market for about 8 months.

When we walked in the door, the odor of decay was overwhelming. Literally. We couldn't walk into the house for more than a moment.

Of course, there was no power, the HVAC had not run for at least as long as it had been on the market, probably longer. There was (probably) a roof leak... and the moisture had allowed mold to grow unchecked.

Of course i called the listing agent, got a recording, left a message and... never heard back. I know that I couldn't have been the first person in the house in eight months... this couldn't have been the first time someone said that the house was having issues.

Now, this is likely a teardown. I couldn't recommend it to any of my buyers. The price was slightly too high for a home in reasonable shape. For what it had become, it wasn't even close. Priced at $345,000 it was about $20k too much. But, it had become a liability and not worth more than $50,000 (value of the land and cost to remove the house).

With banks having collateralization issues, losing $250,000 on this property over spending a little and pricing it reasonably seems kind of stupid. Multiply this by tens of thousands of properties across the country.

from LaneBailey.com