Buying a Foreclosed Home – Foreclosure Homes in Savannah, Georgia
Thinking about buying a foreclosed home in Savannah, Georgia? You might expect to find incredible bargains, but there are some common misconceptions about how banks sell foreclosed properties.
Karin Carr has worked with hundreds of bank-owned properties, also called REO properties, throughout her real estate career. In this video, she explains what buyers should understand before searching for a foreclosure.
Below is a rewritten version of the video's discussion.
Are Foreclosed Homes Sold for Pennies on the Dollar?
One of the biggest myths about foreclosures is that banks are so eager to sell their properties that they'll accept almost any offer.
In reality, a bank may already have suffered substantial financial losses by the time it takes possession of a property. The previous owner may have stopped making mortgage payments, and the lender may have incurred legal expenses during the foreclosure process.
Once the bank owns the home, it may also be responsible for utilities, landscaping, property taxes, homeowners association charges, and other holding costs.
For these reasons, lenders generally try to recover as much money as reasonably possible when selling a foreclosed property.
How Do Banks Determine Foreclosure Prices?
Banks commonly obtain property valuations before listing a foreclosed home. The asking price is influenced by the property's condition, comparable sales, local market conditions, and the lender's financial objectives.
If a house is in excellent condition and likely to attract ordinary homebuyers, there may be little reason to offer a substantial discount.
On the other hand, properties with significant damage or deferred maintenance may be listed for less because buyers will need to spend money on repairs.
Occasionally, a bank may initially price a property too high. Just like other sellers, lenders sometimes need to reduce their asking price if the property doesn't attract acceptable offers.
Will Paying Cash Get You a Huge Discount?
Cash offers can be attractive to banks because they typically involve fewer financing-related uncertainties.
However, offering cash doesn't automatically entitle a buyer to a large discount.
For example, if a bank receives two offers at similar prices, it may prefer the cash offer because there is no mortgage approval contingency.
But if a financed buyer offers substantially more money, the bank may decide that the higher price outweighs the additional risk and time associated with mortgage financing.
The lender's primary objective is generally to obtain the best overall financial outcome, not simply to close as quickly as possible.
Can You Buy a Foreclosed Home With an FHA or VA Loan?
Yes, some foreclosed properties can be purchased using FHA or VA financing.
However, the property must satisfy the applicable lender and loan-program requirements. Homes with serious safety concerns or major missing components may not qualify for standard financing without repairs.
For instance, Karin describes encountering foreclosures where the previous owners removed kitchen cabinets and appliances before leaving. A home without a functional kitchen may fail the property-condition requirements for certain mortgage programs.
If you're planning to use FHA or VA financing, work with your lender and real estate agent to determine whether the property is likely to meet the necessary standards.
How Many Foreclosed Homes Are Available in Savannah?
Foreclosure inventory varies with market conditions, so it's important not to rely on outdated figures.
When Karin originally recorded the video in 2019, she found approximately 25 active or coming-soon foreclosure listings in the Savannah metropolitan area.
That figure was a snapshot of the market at the time, not a representation of current inventory.
Are All the Foreclosures on Zillow Actually for Sale?
Another common misunderstanding involves foreclosure information displayed on major real estate websites.
A homeowner who has fallen behind on mortgage payments may be identified in public records or online foreclosure-related data. That does not necessarily mean the property is currently listed for sale.
Some properties may be in pre-foreclosure, while others may never become bank-owned listings.
If you want to purchase a foreclosed home, it's important to distinguish between properties that are actually available for purchase and properties that simply appear in foreclosure-related searches.
Where Can You Find Foreclosed Homes in Savannah, Georgia?
A real estate agent familiar with REO transactions can help identify available bank-owned homes and explain the purchasing process.
Karin originally invited viewers to request a list of foreclosure properties available throughout the Savannah metropolitan area.
Request a List of Foreclosed Homes in Savannah, Georgia
Before submitting your information, confirm that the linked page is still offering Savannah-area foreclosure listings.
If you're considering buying a foreclosure, the Georgia Coast Homes Team can help you explore available properties and understand the potential benefits, costs, and risks.
About the Author: Karin Carr is a Savannah-area real estate professional who has helped hundreds of families buy and sell homes since 2005. She shares her knowledge of the local real estate market through articles and videos.
Looking to buy a home in the Savannah area? Explore the Savannah real estate home-buying guide, which describes the team's virtual reality house-hunting approach.
Thinking of selling? Learn more about the team's home-selling system.
Georgia Coast Homes Team serves Savannah, Rincon, Guyton, Pooler, Richmond Hill, Tybee Island, the Savannah islands, and surrounding coastal communities.
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