If you’re looking to get the most house for your dollar, a foreclosure can be a potential option for you. But some wonder if those prices are too good to be true when it comes to a foreclosed home. Others might fear they’re benefitting from someone else’s misfortune.
It’s good to know what you’re buying beforehand. Here’s what you should know about foreclosures:
What a Foreclosure Is
A home is foreclosed when the previous owner fails to pay their mortgage for a certain length of time. This can vary from state to state, but it’s a process that takes months to happen, and the residents are given notice long before their hour is taken.
Technically speaking, the previous tenants aren’t actually the owners, but rather, borrowers who have control over the home as long as they make their payments.
A foreclosure is a final solution once all options have been exhausted. It’s in the best interest of both the borrower and the bank/investors for the original mortgage to resume. But when that’s not possible, the lending institution receives ownership of the home as recompense for the outstanding debt.
The lender actually loses money in the deal, and seeks to minimalize lose by selling the house quickly.
There Will Probably Need to be Some Work Done
When a homeowner is selling their house, they generally put in some work to increase the value. This will include little fixes, maintenance checks, deep cleaning, etc. When a home is foreclosed, that doesn’t happen.
The previous tenants would have vacated the property rather quickly. It’s possible some stuff was left behind. If they were in financial hard times, it’s likely they weren’t doing a lot of maintenance around the house.
In more extreme cases, the previous owner may have even caused some damage to the home. This, however, is not the norm.
Still, you can expect to put some work into a foreclosure purchase. If you were planning to do renovation on your new home regardless, then a foreclosure is a great starting point.
Get Your Own Inspecting Done
Hiring a home inspector is a great idea for most any purchase. For buying a foreclosure, however, it’s a must. Check the house, the heater, the plumbing, the roof, and everything else so that you know exactly what you’re buying.
It’s a Fairly Detached Process
Since you’re buying the home through the bank, buying a foreclosure is a strictly-businessaffair. You won’t meet the previous owner or view a seller’s history. Either you’ll buy it from a foreclosure auction or your agent will give your offer to the bank and go from there.
You’ll Want an Experienced Realtor
To navigate the potential pitfalls of the foreclosure market, you’ll need a real estate agent with some great experience. The team at Metro San Diego Realty, our team knows what to check for when buying a home, foreclosure or otherwise. With us, you have the full power of the San Diego MLS at your side.
Contact us today, and we can help make sure you don’t get taken advantage of.
Posted by Jason Coriano on
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