Precautions When Buying A Foreclosed Home
You can get a foreclosed home at a bargain, but you may also experience major buyer's remorse if you aren't careful with such a purchase. This is because buying a foreclosed home is unlike buying any other type of real estate property. Keep the following precautions in mind when buying a foreclosed property:
Don't Be Lured In By the Low Asking Price
Most people are attracted to foreclosures due to the relatively low prices of the properties. Buying a property at a low price isn't bad– as long as the price isn't the only reason you have for buying the property. Don't forget that a good percentage of foreclosed properties have defects because their owners don't have the finances to take care of routine repairs. Therefore, evaluate everything in totality instead of making a decision based on the offer price along.
Don't Assume it's a Bargain
Since foreclosed properties are typically offered at low prices, you may find yourself getting excited thinking you have landed a great bargain. However, you need to take a step back and determine if the price is really a bargain. After all, foreclosed properties tend to be located in neighborhoods on the decline, so what you might be thinking of as a bargain may actually be the true cost of the property considering its state and the state of the neighborhood. Therefore, do a comp analysis just as you would for any other house to know the true value of the property.
Understand the Purchase Process
Buying a foreclosure property is a bit different from buying any other home. You need to understand this unique purchase process before committing yourself to it. For example, the process may take longer than a conventional purchase. Also, in most cases, you won't need to ask for repairs because a foreclosed property is sold on an as-is basis. Know what you are getting into right from the beginning.
Carefully Evaluate the Neighborhood
Lastly, you also need to analyze the neighborhood since it may give you an indication of why the lender is foreclosing the property. A neighborhood analysis is even more crucial if multiple homes are being foreclosed in the area. In such a case, you may be buying a home that will quickly lose its value because the neighborhood is on a downward spiral.
Hopefully, your purchase process will be without a glitch and you will land a bargain property. Involve an experienced real estate agentright from the start of the process to increase your odds of landing a great foreclosed property.