There are many types of foreclosures available in Colorado Springs and one type of foreclosure is a VA Repo. These types of properties are sold by the Veterans Administration (VA).
There are a few important things buyers should be aware of when looking to purchase a VA Repo in Colorado Springs.
1. Inspection – Normally, buyers reserve the right to perform an inspection of the property they wish to purchase and if something is discovered during the inspection regarding the home’s condition, buyers can normally terminate the contract and get their earnest money back. VA does not have an inspection clause in their contract and buyers run the risk of losing their earnest money if they back out of the contract. Also, VA properties are “sold as is” so don’t’ expect the seller to pay for repairs.
2. Title Insurance– VA does not provide title insurance for their properties, therefore, buyers have to pay for title insurance that the seller would normally pay for in normal transactions. Title insurance varies depending on the contract price of the home and adds a few extra hundred dollars to buyer closing costs.
3. Contract– The contract to purchase a property owned by VA is different than the Contract to Buy and Sell Real Estate that is used in Colorado. The contract is only two pages and is made up of four sections. The buyer also determines the amount to be given for earnest money and if VA does not see it as sufficient they can make a request for more.
There is a benefit for investors who wish to purchase a VA Repo but do not have enough funds for a 20% down payment that is required by most lenders on investment properties. VA Vendee financing allows buyers or investors to purchase a VA property with as little as 5% down.
If you are interested in purchasing a VA Repo, contact Patricia Beck, your Colorado Springs Real Estate Agent.