If you are looking for a new home for yourself and your family you may be tempted to check into buying home foreclosures. Foreclosures can allow you to get a home at a lower price, but there are also pitfalls. Planning and research are key to find the solution that will work the best for your future needs.
The Positives of Buying on Foreclosure
While foreclosure rates are down from a few years ago, because of the financial strain that has come upon many homeowners, there are still a lot of foreclosures on the market. In many cases this can mean that you get to purchase a property for only the amount that is still left on the bank note from the original buyer’s loan. Your bank loan for the foreclosed home could easily be less than you pay per month for rent on a home that is not yours.
You can purchase a home for below market value in cases. This can work well for you if you need a home and it can also pay off for you if you want to invest in rental properties. If you have a low cost per month bank loan to cover the cost of the foreclosed home and rent the home out, you still make money.
The Challenges and Pitfall
When you consider buying home foreclosures you will find that regardless of the condition that the home is in, price is non-negotiable. The loan company that holds the property wants their money out of it. It means that you will have to pay not only for the home but the repairs that are necessary.
Finding a foreclosed home that does not have a lot of issues can be a daunting task with so many homes on the market. It can help to have a focused approach and target specific neighborhoods. It could save you from making a mistake in purchasing just because you get frustrated by looking through so many homes.
When you decide to buy a foreclosed home, you need to make sure that you are getting the right price on it. An inspection as well as quotes from potential repairmen should be taken into consideration before you enter into an agreement.
The cost for inspection will come out of your pocket but if you purchase a home that has mold or termites, the cost to repair it combined with the purchase price could be much more than you want. Therefore it will not be the investment opportunity that you were hoping for.
Other Considerations to Take into Account
Patience is key to buying foreclosures. Not only is getting the right price and condition important, the process on a foreclosure sale can be beset with delays. If you do not find the prices that you can live with and the repairs that are reasonably priced with one home, do not hesitate to pass it up. There are many foreclosures coming onto the market right now and it could pay off to wait and catch the next one.
It is also important to find a realtor that specializes in foreclosures. The reason why is because there are a lot more technicalities in buying foreclosed homes. You will need to know that the person you are working with already has knowledge and experience of what they need to do to ensure the deal goes through.
At the Ryan Kramer Team, we have years of experience helping buyers purchase foreclosed homes. Contact us and let us our team of professionals help you find the home you want with a smooth transaction process.