Foreclosed properties can be a good financial investment, but it's smart to know what you are buying before you begin. A foreclosed property is a home that has been recovered by the lender due to payment failure by the homeowner. Interested homebuyers can then purchase the foreclosed home via two processes: through a real estate agent or through a public auction.
While a foreclosed home may be a more affordable option than a traditional home purchase, there are a few important points to be aware of:
- Property Condition - Because the lender did not maintain the property before acquiring it, they may not have any history of home maintenance available. Therefore, the lender may not be able to verify the property condition or complete a Seller's Disclosure. Buyers are encouraged to complete a professional home inspection of the property.
- Title Issues - It is possible that title issues could be discovered during the due diligence period that may add time to the closing process.
- Timing - Foreclosed home sales often take much longer than a traditional home sale. Instead of submitting the offer to an individual seller, you are submitting an offer to a bank or lender. Many banks have several foreclosures listed at a time, and there are several steps of approval that the offer must go through before it is accepted. Buyers should work with their real estate agent to coordinate the date that they wish to take possession of the property to make sure that it is realistic and attainable.
A foreclosed home may be a solid financial decision for you. With the right guidance, you could find something that suits your needs well. Call me today. I would love to further discuss your home buying options and help you decide if buying a foreclosure is right for you!