Should You Buy a Foreclosure Home
The cost for real estate is on the rise in many areas. This has led prospective home buyers to look for new and fresh ways to buy as much house as they possibly can for as little money as possible. One of the most popular ways that buyers do this is to buy a foreclosure home.
There are two types of foreclosures that you can buy and you can save a lot of money with each type. The first way that you can buy a foreclosure home is to purchase a home that has already been foreclosed upon and is being offered for resell at auction or by the mortgage company. Or you can buy a home that has entered foreclosure proceedings but has yet to be foreclosed upon and is still in the hands of the homeowner. Both types of purchases have their advantages, but they take a little more work than a conventional purchase.
Buying a house at auction or through a mortgage company is probably the easiest way to buy a foreclosure home. You can find these properties by reading notices in the paper or by contacting your local courthouse for a listing of upcoming real estate auctions. The disadvantages to buying a home this way is that there will be multiple bidders or offers for the property which will make it more difficult to purchase the home you’ve set your eye on. You will also have to be able to provide a substantial down payment at auction with the remaining balance being due shortly after your bid is chosen.
Buying a foreclosure home that is still in the hands of the homeowner gives you a little more flexibility as far as financing is concerned. You can finance these purchases the same way that you would any other type of real estate purchase and may even be able to secure a loan that requires no down payment. The downside to buying a distressed home is that you have to research court records to find such properties and then cold call homeowners who are already emotional about the potential loss of their home.
While it takes a great deal of extra work and planning to buy a foreclosure home many people feel that the rewards they receive are well worth the effort. In many cases, foreclosure homes can be purchased for a fraction of what they would cost on the real estate market. This can make properties in exclusive neighborhoods affordable or leave enough money left over to completely remodel the home. Foreclosed properties may even be an option for families who thought they would never be able to afford a home of their own.
Granted, some foreclosed properties need a lot of work, but many do not need any work at all. So, don’t think that buying a foreclosed property equals buying a fixer. Just be sure to research the property for potential repair issues before you buy a foreclosure home.