Authored by Emeka Justice in Real Estate
Published on 03-17-2009
The time for buying a foreclosed home is now because of the number of homes that are currently on the market. The economy has caused a lot of people to lose their home, and due to banks trying to get what they can back out of the home, the price a buyer can get one for could be very low.
Whether you should but a foreclosed home depends, of course, on your financial situation. A lot of people think they can just buy the home and move right in. The problem with that is people need to realize there are a few more financial obligations involved with buying a foreclosed home than meets the eye.
If you have never owned a home, chances are you would be in for a few surprises if you bought a foreclosed home that needed a few repairs, or if the home had hidden closing costs. If you have never bought property before, you need to educate yourself about the buying process before jumping into deal where you may stumble over surprises that could end up costing you more than you have.
You should have outstanding credit and a low amount of owed debt before you consider buying a foreclosed home. Having a source of cash would be helpful for all the hidden costs that always seem to pop up when buying real estate. You may end up having to pay past due taxes on a foreclosed home or pay for extensive repairs. The best thing to do is to thoroughly investigate the home before buying if at all possible.
Buying a foreclosed home may mean that the seller is more willing to do things your way because they are ready to get the home off their hands. You would be most likely in the driver’s seat when it comes to cutting a deal that is in your favor. Another thing that will work in your favor when buying a foreclosed home is that these homes usually haven’t been out on the open market and you will have less competition in trying to buy the foreclosed property.
If you have a foreclosed home that you have your eye on to try and buy, research that home’s mortgage. You may find judgments against the home like the second mortgage that was taken out and wasn’t paid. You will be responsible for debts like these if you buy a foreclosed home that has such judgments against it.
Home improvements are going to be a big cost for most foreclosed homes, especially if the property has been vacant for a while. You may find it in a state of serious disrepair with missing appliances, broken toilets and faucets due to vandalism, and infestations of bugs or other creatures. If you buy a foreclosed and the tenants are still living there, you may also run into problems having them move. Sometimes people are very volatile when it comes to having their home and you may end up having to pay to have them evicted.