Know which homes to avoid before you purchase a foreclosed property.
When you look at homes for sale, foreclosures may come with their fair share of risks. Buying a foreclosed home is a great way to get a new house at a good price, but if you aren't careful, your dream home can end up a nightmare. It is important to know what types of homes to avoid before you purchase a foreclosed property.
You should avoid purchasing a home without seeing it in person first. The pictures and price tag might look great when you review foreclosure listings, but the home may be in bad condition. Some homeowners facing foreclosure will either allow a home to fall into disrepair or purposely damage the property. You may get a great price on the home, but if you have to replace copper wiring, light fixtures and other essentials, you end up spending more than if you had purchased a traditional home.
Even if a home looks good at first, you might miss things that may end up costing you money in the long run. Some homebuyers opt not to spend extra money for a home inspection when researching homes for sale. Foreclosed homes can have a number of problems that only a home inspector can identify. Even if an inspection is expensive, your potential savings from spotting problems in the house is well worth the price paid. A typical home inspection costs between $300 and $600 and you get get a detailed home inspection report that you can then use to determine the cost of any necessary repairs. This information can reveal the actual cost of your foreclosed home, not just the listing price.
When you look at homes for sale, foreclosures are sometimes still occupied by the previous owner. In some cases, the home might be occupied by a renter or even a squatter. If you're planning to move into the home after making the purchase, this can create a difficult situation. You may be forced to evict the occupants of the home, which can sometimes result in retaliation and damage to the property. Though occupied homes are one of the biggest foreclosure risks, you can mitigate this by looking at real estate-owned (REO) properties instead of owner-occupied homes. REO properties are owned by the bank and are no longer occupied.
The market is full of beautiful homes for sale. Foreclosures are just one option. If you are hoping for a great deal on your next new home, use RealtyNow to get free real estate listings in your area.