what are the advantages and disadvantages of bying a foreclosure home?
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May 29th, 2010 at 12:27 am
The disadvantages are if you attempt to buy a home that is a “short sale” then expect it to be a six month process. This is when the homeowners owe more than the home is worth and are trying to sell it for it’s current value.
You wind up waiting on banks (who are already in over the heads) and may not get a response on an offer for several months.
Buying a REPO/Bank owned home is less of a hassle. The bank takes the most attractive offer. Except there to be upwards of 20 separate offers submitted.
Competition is cut-throat out there right now.
A big disadvantage to buying a foreclosed home is as a buyer you can’t request repairs to be done to the home. You can’t request a credit towards your closing costs.
You’ll just have to weigh out the benefits
May 31st, 2010 at 6:34 pm
foreclosure homes can be a great deal.
a few things you need to know:
1. the house may need some work, since it may not have been maintained properly.
2. if/when you decide to sell the house later on, you may have an issue with the title, make sure you have title insurance and get the title cleaned up asap..
June 3rd, 2010 at 11:15 am
The biggest advantage is a decent home (if you can find one) at a low price. However, don’t limit yourself to only looking at foreclosures or short sales. Owner-occupied housing is often just as reasonably price and is usually in better shape.
The disadvantages to buying a foreclosure are many. The previous owners may have trashed it (I’ve seen fecal material smashed on walls and carpets soaked in urine) and the owner may have sabotaged some systems of the home to ‘get even’ with the bank. And frequently the bank wants you to sign an addendum agreeing to accept it as is. So, if your realtor hasn’t been around for a while and/or is just interested in getting a sale, he may urge you to agree to this condition, which would not be good for you. Always get an inspection.
There is also the problem of dealing with a bank owned property. They aren’t set up to lose money, so getting an answer out of them can be a frustrating adventure.
On the other hand, if you don’t mind jumping through these hoops and more, you can find a good deal out there. Regardless of whether you go for a foreclosed property or an owner-occupied home, there has never been a better time to buy. So find a realtor you trust and start looking! Good luck.