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What is a foreclosure? What you need to know when buying a REO property.

Now, our second type is our foreclosure. Before we get into the foreclosure, let me give you our cheesy analogy. Our cheesy analogy is that us and your lender, we're your pilot and co-pilot. We're on a first class airline and we're trying to get to your real estate goals, which is our destination.

Now, real estate is stressful. The reality is we're in like the top five most stressful things, death, divorce, getting married, having kids, buying and selling real estate. We're like in the top five. With that in mind, there's going to be some turbulence. We're going to try to keep this as smooth as possible. That's a big part of what we do. But there may still be some little bumps.

When we're talking about a foreclosure, normally a foreclosure is a little bit more turbulent than a happy homeowner. I know there's less foreclosures out there, but just real quick, here's the idea. If someone maybe fell on hard times and could not afford their home, what do you think the chances are that they got the HVAC serviced, that they cleaned the gutters, that they cleaned out the drain at the bottom, if there's a basement, where the little drain thing is, all that normal kind of stuff that people do when they live in their home, chances are pretty slim to none.

Now, you might be saying Brendan, man, I know this couple, they just took amazing care of their house, but they fell on hard times. They split up, lost their job, whatever. Okay, that's fine. Here's the question? How long did it take the bank to get the house and put it back on the market? Three months, six months, a year, two years, three years. I've seen it all. And the problem is during that time was the electricity on? Was someone cleaning out the gutters? Were they cleaning out that little basement drain thing? Were they doing other stuff? Was the sump pump running? In other words, we're asking for deferred maintenance. We're asking for problems. Now, that's okay. I mean, look, the reality is most places that you get into you're going to have a problem in the first six months, but that's even more true in a foreclosure. So, I just want you to be aware when we're dealing with foreclosures, there's usually more deferred maintenance. Okay?

The last thing that I'm going to say about foreclosures is that really the bank, they're going to do what they want. They don't care about you, and they're going to do things that aren't necessarily logical. And with that in mind, I have some clients, who in years past, would come to me and say, "Brendan, I want to buy foreclosure." I'd be like, "That's great. How come?" And they say, "Well, because I want a deal." Here's what I would tell you is just because it's a foreclosure does not make it a deal. It could be a deal, but just because it is, doesn't make it so. All right?

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