Should You Buy a Home After Foreclosure?

By
Real Estate Broker/Owner with SD Home Source Realty BRE #01363537

Should You Buy a Home After Foreclosure?I received a call from a buyer interested in a property advertised on craigslist. Currently owned by an investment company, they were offering a rent-to-own and seller financing options. This buyer was interested in buying a home after foreclosure.

The buyer, like so many, had gone through tough times. Upon questioning, he had nothing to put down on a new home, and only had a small retirement account with no liquid savings.

Despite the fact that he really wanted to an opportunity to buy again, my best advice was not to buy right now. I believe strongly that home ownership enhances the quality of one’s life. It is also however, expensive, particularly here in San Diego.

Buying any home, particularly a house, means having the financial means to handle repairs, maintenance, and anything else that comes up. Roofs can leak, drains can clog, water heaters die, the possible repair list is endless. With no available savings, and damaged credit, how does one handle these things?

If you are in a recovery mode financially, I encourage you to forget about owning a home for a couple of years. Focus on cutting your living costs, rebuilding your credit, and saving money. At the least, give yourself a year or two, then re-evaluate.

There are eager lenders everywhere who will try to get you a mortgage despite your financial challenges. Even if you can get a mortgage, it will typically have higher interest rates and make saving money impossible. Collectively, millions of people have come through hard times. If you are one of these folks who is thinking of buying a home after foreclosure, take your time before jumping back into buying a home.

Comments (3)

Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker - Retired

Cindy, sage advice for those who have a desire to move forward before they are ready! Enjoy your day!

Apr 09, 2015 08:55 PM
Evelyn Johnston
Friends & Neighbors Real Estate - Elkhart, IN
The People You Know, Like and Trust!

Rebuilding is essential not only to your financial health, but your emotional one as well.

Apr 12, 2015 11:37 AM
Silvia Dukes PA, Broker Associate, CRS, CIPS, SRES
Tropic Shores Realty - Ich spreche Deutsch! - Spring Hill, FL
Florida Waterfront and Country Club Living

Cindy, sometimes people just need to have the time to get back on their feet even when that means they'll have to rent for a while. 

Apr 15, 2015 11:39 AM