The 2008 financial crisis saw many people losing their homes. The pre-foreclosure or foreclosed on homes were often offered at bargain prices, attracting investors. There are certainly fewer foreclosures on the market nowadays, but many homebuyers still consider them when browsing homes for sale. A foreclosure may come at a discounted price, but is it worth it? Here are a few things to consider if you're thinking about buying a foreclosure:
Many investors have been attracted to foreclosures, but that hasn't necessarily played out well for them. If you're looking to purchase an investment property, you should know that foreclosures lower the value of homes in the neighborhood. That means your investment might not see as great of a return as expected. If you're buying from a bank, you should keep in mind that many of these homes have been abandoned for quite some time, which means you could have problems with pests or other maintenance issues.
One reason to keep foreclosures in mind is that buying a foreclosed or pre-foreclosure home could grant you access to neighborhoods you couldn't normally afford. If you have kids, this could be your chance to get them into the best school district. That being said, homeowners and banks often have a lot of costs to recoup, so a foreclosure isn't always the cheapest option. Buying a fixer-upper in your desired neighborhood could be another path.
Think Before You Auction
Buying a house on auction could offer amazing deals, but it's also a mixed bag. When you buy your house at auction, you don't have the opportunity to really see the house beforehand, let alone have an inspector take a look. This means that what you thought was a great deal could be a huge money suck, leading to lots of repairs and renovations.
Buy from a Bank
When purchasing a foreclosure, you should consider buying from a bank. These homes are called REO, real-estate owned homes, and have already been through the whole foreclosure process. Usually, banks are eager to get these pieces of property off of their hands because they don't want to pay taxes on them. Unlike an auction, you can hire an inspector and have them come take a look ahead of time to help you decide if a foreclosure is a good investment.
When shopping for a home, you have a lot of options. A foreclosure could be a huge opportunity or a dud. Do your research and get a thorough inspection before you decide. Contact a company like Mckee Kubasko Group Real Estate for more information and assistance.