Interested in a Foreclosed Home? Read This First!

Real Estate Agent

Five years back, a bank foreclosed house miles away could be spotted by a home buyer pretty easily.

Currently, banks try and reduce the loss they get for these sorts of sales as opposed to trying to sell a property ASAP. This creates some possible dangers, and benefits, for home buyers contemplating buying a foreclosed house.

Below are a few pros and cons for purchasing a foreclosed home in today's marketplace. Hopefully you'll find these to be pretty useful:

PRO: They're still more affordable

You might see a foreclosed home as much as 5% less than another similar house in the area that hasn't been foreclosed on. You used to see them in bad shape as low as 20% under.

CON: Foreclosed houses may be really high-risk

Today, many banks will invest cash to help make the listings a bit better and bump up the prices. In return, they may be not as ready to sell and not as flexible on cost.

Behind the scenes, all these are sales that is high-risk.

Many investors had no problem with this particular risk, nevertheless they're not as eager for these now because the super-hot deals are no longer around.

CON: Many houses that are foreclosed will not be in prime places

A lot of the foreclosed houses of today are in less desirable areas of school districts or towns. In the event you see that the cost of a potential property is pretty low, keep in mind that it the low cost might not actually be due to the foreclosure itself. It may be the place that the house resides, and you want to avoid getting stuck trying to get rid of a house in a poor place in a few years. Foreclosed houses in places that are great will sell fast.

CON: Banks are not individuals

Just think of this like going back and forth with a computer who only looks at facts in a spreadsheet. Unlike your average seller who might care about your individual qualifications, your position or marketplace history, banks do not. Anticipate a large amount of rejection if the amounts you're submitting do not work in the bank's favor.

These days a buyer can no longer assume that a home that is foreclosed is going to be a sweet deal. They're fewer and further between, though it is possible to still locate a needle in the haystack.

Banks need top dollar from their foreclosure inventory. They see the headlines and see the marketplace. Research your options and do the work before signing on the dotted line using a good local realtor to ensure that you get the best deal you can possibly get!

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