What You Should Know Before Buying A Foreclosure Home – As a buyer, you want to get the“best deal” on a home and have been turning towards foreclosures because they are under the impression they can get more for their money by doing so. Sometimes this is the case, but sometimes it’s not. Here are a few tips before you buy a foreclosure…
- It’s Typically “As-Is”- This means the home is sold in the current condition it is in. In most cases you can still have a home inspection, and we recommend that you do, but it doesn’t mean the seller (aka: the bank) will make any repairs. The home inspection is just for you to be able to know what your buying and what needs fixed in the home before you do.
- Black & White Contracts- Typically there is little wiggle room when negotiating with a bank. If you want to negotiate for the seller to pay for your closing costs or “low-ball” the offer, typically it just depends on what the bottom line is for the bank. Also, look out for a lengthy contract from the bank with a lot of detail and additional addendums. This is not necessarily a bad thing, but make sure you read through the contract and know what you’re signing. These contracts are what they are and typically there is no negotiating terms with a bank.
- Liens- When buying a foreclosure, make sure to check into any possible liens against the property. When you are buying a foreclosure, this means the previous homeowner defaulted on their mortgage payments so the bank took over the home. This could also mean they defaulted on other payments that can effect the purchase of the home. Check into any outstanding Home Owner’s Association payments as well as any other bills that can transfer to you at the time of closing.
- Expenses- Typically when a home is sold “as-is” there can be an opportunity for a lot of repairs. Make sure you do your due diligence and get a home inspection then follow that up by getting quotes and projecting what costs you may have to repair the home.
Buying a foreclosure sometimes means you are getting a great deal on a home, but not always. Sometimes buying a home that is not in foreclosure, that doesn’t have as many repairs to make may be the better option. Make sure to know your current real estate market and do the research. Is a foreclosure truly the better option for you?