Authored by Kate Beswick in Real Estate
Published on 11-29-2009
With the real estate market experiencing the global downturn just recently, there has been an up rise of foreclosure properties coming onto the market. This has many people thinking about scooping up these properties while they come at such a low price. But foreclosures may not be for everyone. Before you consider buying a foreclosed property, you should also consider that you may not be buying the homes of your dreams. Also, because dealing with foreclosed properties is very different than dealing with new listings on the market, you will need to have a very good understanding of the real estate market, and work with people who have a lot of experience working in foreclosures specifically.
One of the things you should consider when you think about buying a foreclosure is not if you should buy, but when you should buy. First-time home buyers are generally not advised to purchase a foreclosed home. This is because these home buyers generally don’t have enough of an understanding as to how the real estate market works and so, buying from a listing will be confusing enough. First-time home buyers also don’t often have a good grasp on what it takes to keep a home in good shape and running order. While it’s easy enough to pick these things up along the way, it becomes much more difficult when there are already major home repairs that need to be taken care of.
Another thing that those who have experienced the home buying process before may have is a network of professionals who can help them through the foreclosure process. Even those who have bought or sold a home before won’t know the specifics that come along with foreclosures. Having access to this knowledge and expertise will go a very long way in helping to make the foreclosure process much smoother.
Another thing to consider is that although there are many foreclosures available during a downturn in the market, it’s also this very downturn that can create problems with buying a foreclosed property. A market flooded with foreclosed homes indicates that it’s difficult to maintain mortgage payments in today’s economy and that people are not buying as many homes as they used to. This doesn’t mean that you can never buy foreclosed properties in a slow real estate market. It simply means that if you do purchase a foreclosed home, you need to ensure that you have the means to maintain it and pay for it until the market starts to see an upturn once again.
Before buying a foreclosed home, you also need to speak to a professional in the field who will be able to give you a better idea of just how much buying a foreclosure will cost you. Although foreclosed homes do come cheaper than other homes put on the market, there are many surprise costs that come with them. Not knowing about these expenses beforehand can end up making the foreclosure a much bigger cost to you than you originally thought it would be.