For the past years, the number of houses listed for foreclosure has been increasing. This is because people have been losing homes brought by unemployment and difficulties of paying the mortgage. This has had bad effects to the real estate industry. Although the government has been sending out stimulus funds to help improve housing market, still real estate’s progression would not be anything but sluggish (not when people still find it hard to catch up with their monthly mortgage and jobs are unavailable).
Of course, it does not mean that aspiring homeowners should lose their hope. Because of the houses that were foreclosed, it paved a way to let few persistent home buyers and investors to purchase houses at an economical deal. But amidst the good news lie hesitations by the public. Certain downsides have been pointed in buying foreclosure homes.
It can be confusing whether to proceed in buying these houses. However, as a buyer it is part of your decision-making to weigh the good and the bad.
To help you out, here are the good and bad points that you can study before buying foreclosed homes.
- Great opportunities await if you are able to purchase a myriad of houses that you can use to engage in a rental business. This opportunity is made possible because foreclosed homes can be purchased at a low price.
- There is even more room for negotiations or requests for discounted prices. The outcome is usually favorable to you.
- Buying the house is not directly to the buyer. This means you have to wait for auctions or for the bank to put it up on sale.
- Lucky for you if there are no other takers but expensive homes with basement prices would naturally give you more competition.
- Aside from that, you would have to shoulder the repairs because institutions would not generally fix the place up for display.
- If it happened you purchase a home with stubborn owners who defy eviction, this could be a problem.
- Researching can be quite difficult. Therefore, if the owner owes a great amount with regards to property tax that will become your problem.
From the looks of it, people would grab the chance of buying these houses because of the lower purchase price. There is nothing wrong with that since it is normal for consumers to look for an economical deal. However, sometimes there is just too much drama and legal concerns involved.
If there is no stopping you, the best thing to do is research. Know the process involved in buying them. Gather more information about the house if you have the time. Do a title search to uncover undisclosed liens or taxes owned. You can also consider getting Real Estate Owned properties rather than the auctioned ones (to be sure that there are no problems in papers and titles). Lastly, buy houses that are vacant to avoid legal expenses involved in the eviction process.
If, otherwise, convinced that this is not for you, consider other options in buying homes. Try obtaining them through short sales or pre-foreclosures.