There are some controversial facts out there about buying a foreclosure home. There are definitely pros and cons about buying one, but in the end it’s for you to decide if it’s the best choice for you.
- Price: Banks usually don’t want to have to “hold” foreclosures for too long because of costs on their end. This means that the asking price will most likely be much smaller than normal.
- Variety: There is a wide range of types of foreclosed houses, and with varying price points. It probably isn’t too hard to find one that’s what you’re looking for.
- Fixer-Upper: You can buy a cheaper, less cared for foreclosure, spend some money to fix it up, and increase its value for the future. There are actual people who spend their lives “flipping” houses, doing just this.
- Helping the Area: If you buy one of these houses and renovate, you are benefitting the area by increasing the value of the home and the ones around it.
- Competing Buyers: Since they’re as cheap as they are, foreclosures get bought quickly. Act fast and be ready to bid with interest buyers.
- Repairs: Time, effort, and money are needed to fix most foreclosures. If the house has been vacant for a bit, there’s a higher chance it will need more maintenance.
- Secret Costs: If there’s a lien on the property or something of the sort, then you might have to pay off the past owner’s debts. If they haven’t even left yet, you may end up paying for eviction fees.
- Neighborhood: Areas with a higher concentration of foreclosures can be hard to appreciate in value. Lots of foreclosures can weigh market values down in one area. Also, these same areas can have higher crime rates, so make sure to research beforehand.
- Emotionally Draining: More paperwork, time, and energy can be spent to sort out foreclosure proceedings. Make sure you’re prepared for this.