Which is a better buy a Brand New Home or a Bank Owned/Foreclosure Home?

Real Estate Agent with RE/MAX of Valencia (Hall of Fame) 30 year Valencia Resident BRE# 01215778

Homes in Santa Clarita communities such as Valencia, Stevenson Ranch, Saugus, Castaic, Newhall & Canyon Country are being sold at a price that is undervalued.  This community offers safety, cleanliness, great schools and a home you look forward to coming home to!

The fear of a worsening economy and unstable job situation has slowed the local real estate market.  Short Sale listings dominate the current inventory and many buyers avoid them due to their experience or stories told to them from others.

Buyers want the best home at the best price in the best location that will be the best financial investment for their financial future.  There are 2 types of sales that offer the best opportunity to take advantage of all of these concerns at this time.  These sales are a Bank Owned Home also called REO or Foreclosure & A Brand New Home.

There are many reasons that both are offering the best value and they have several in common and each has distinct advantages and disadvantages.  Following are the benefits and disadvantages of each.

Reasons in common "Why buying a Bank Owned Home & Brand New Home" offers the best value:

  • Both type of sales need to be sold right away.
  • Failure to sell costs the owner/builder money.
  • A Buyer will get an answer right away.
  • The Seller has no emotional investment in the home.
  • Prices and incentives may be given.

Which is a Better Buy at this time?

  • Price wise the Bank Owned home will be the better buy as the Bank, Lender or Investor has too many homes to worry about getting top dollar.  The homes will sell quickly or the price will be lowered.
  • Condition wise a Brand New Home can not be beat.  There are inspections and the New Home Builder will correct any adverse condition and guarantee the home long after the close of escrow.
  • Bank Owned Homes have an advantage of being in many locations and a Buyer will know the neighbors and neighborhood.  There won't be construction to live with after closing escrow.
  • Brand New Homes have no past history and no unknown problems from a previous home owner.

Disadvantages of Each Type of Sale:

  • Bank Owned Homes may have been mistreated or even sabotaged.  The homes are sold in as is condition.  The previous home owner my have information on the home such as death in the home or drug dealing that won't be disclosed by the Bank or Investor.
  • Brand New Home, especially in the Santa Clarita Valley, have a high additional monthly payment which include a mello roos bond and HOA fee.  The sales team is trained to explain the mello roos in a manner that makes it palatable.  Many new home buyers can't understand why this wasn't a concern when they bought yet selling is a different story.

This comparison makes a Bank Owned Home the better investment & Buying a Brand New Home a better choice.  Simply put each buyer will gravitate to the choice that best fits their life style.  eather way you go, buying either of these types of sales makes a lot of sense at this time!

Your Friend & Realtor,

Tony Lewis * RE/MAX of Valencia, Ca. * www.TonyLewis.com * tonygllewis@yahoo.com * 661-702-4720

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Elizabeth Birmingham
EB Realty - Grand Junction, CO

Buy what you feel is the best for you, your family and your pocketbook. Buying a house is like buying art. Buy what you like and can afford. Don't worry about the investment. 

Aug 04, 2011 06:54 AM #1
Than Maynard
Coldwell Banker Heart of Oklahoma - Purcell, OK
Broker - Licensed to List & Sell - 405-990-8862

CAn you fix things? Will you have to hire all the repairs? You get a (several actually) warranty with new construction and everything is NEW. :-)

Aug 04, 2011 07:00 AM #2
Victor Zuniga
Berkshire Hathaway Home Services California Properties - San Diego, CA

Buyers can get a great deal on foreclosures but odds are that the foreclosure will not be in as good a shape as the new home so that's a huge thing to consider.

Aug 04, 2011 07:27 AM #3
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Tony Lewis

RE/MAX Valencia, Stevenson Ranch, Santa Clarita
Home values are rising, want to know the value of your home?
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