When looking for your next home, you might have noticed that there are some foreclosed homes that are in your area. You might have noticed they are in a cheaper price range as well. Let’s go over a few good to know things about foreclosed homes before buying one.
When the property owner could no longer afford to make the payment on the home and selling the home isn’t an option, a home would be foreclosed on. The ownership would then belong to the bank, mortgage company or even a government agency. Let’s touch really quick on the importance of knowing the difference between a foreclosure and a short sale. A short sale is when the homeowner owes a lender more than what the house is valued at. The short sale takes place when the lender agrees to take less than the full amount that is owed. This is an alternative for the owner instead of being foreclosed on.
With purchasing a property that’s been foreclosed on, there may be additional cost that arise. This may include repairs that need to be made that the bank isn’t willing to make, or it could be something like the lack of seller concessions that would have you bringing in more funds to closing, funds you may or may not have. There could be things that would need to be replaced due to the property being vandalized, such as stolen fixtures, copper removed from electrical items, etc. We suggest that you chose a real estate agent that specializes in foreclosed properties. They will be able to help you determine if a foreclosed property is best for your budget.