Buying a foreclosure property can be a great move if you’re after a good deal on a home. Whether for your own residence or as an investment property, a foreclosure offers many advantages. However, there are definite pros and cons when pursuing this type of real estate transaction.
Before moving forward with a foreclosure sale, you will want to evaluate the plusses and minuses of doing so. As you might guess, a foreclosure purchase comes with a different set of conditions than those for a traditional resale home. Consider the following:
Pros of Buying A Foreclosure
- There are many options when looking at foreclosure homes. They can be found in any size, price range, and neighborhood.
- There is definite potential for a good deal. You can sometimes get a discounted asking price if the foreclosure lender is eager to unload the home.
- Your potential for profit at resale could be considerable if you consider the home an investment. This likely means you will need to include some home improvement as the condition of foreclosed homes is not always move-in ready.
Cons of Buying a Foreclosure
- Foreclosed homes are not typically left in the best shape. Previous owners who have defaulted on their loans often do not have the funding to maintain their homes properly. As such, considerable repairs and upgrades will probably be necessary to make a foreclosed home livable.
- You may inherit some financial burdens when purchasing a foreclosed property. There could be unpaid taxes, construction loans, or home equity lines of credit to deal with.
- Lenders want to get the highest price possible, so competition for a foreclosure is likely. A buyer with a sweeter deal could outbid you at the last minute.
- Because there is additional paperwork and red tape involved, the process of buying a foreclosed home can take significantly longer than buying a traditional resale home. It may also take days or even weeks to hear back from the lender once you have made an offer.
The best piece of advice when considering the purchase of a foreclosed property is to be prepared, be flexible, and be patient. Having your financial resources in order and being willing to expect any possible outcome are the keys to potential success.
To learn more about foreclosures and how the purchase process works, contact us here at Shield Property and Sales.Contact us