Before you even begin searching for a home, you have an idea of how much you are willing to spend, along with an image of the type of house that your budget can actually buy.  The exception to this situation is foreclosure properties.  This is because foreclosure properties are known to sell for significantly less than their original value.  What does this mean for you? It means that your budget will be able to buy a larger house than you had ever imagined.

The Advantages

Obviously, the discounted initial price that the house is selling for is a HUGE advantage.  Foreclosures are known for selling for a lot less than what the previous owners paid.  Other advantages of buying a foreclosure include:

  • Lower purchase prices means a lower down payment as well which is an advantage to a lot of home buyers. 
  • The buyer is able to use regular mortgage financing.
  • The seller is legally required to provide a complete history of the home’s condition, problems, and repairs.

What to look out for:

There are certain things to be careful of when looking to buy a foreclosure.  For starters, think about the previous owners.  The reason the house is foreclosure is because they couldn’t make the payments (for whatever reason).  This means that more often than not, the condition of the house is less than ideal.  The amount of maintenance and repairs that need to be done can quickly add to your initial cost.  Other disadvantages can include:

  • The previous owners selling major appliances and other furniture and fixtures within the home.
  • The seller might not be able to negotiate below the outstanding balance of the existing mortgage.
  • Can be a long process with many unexpected findings that the buyer isn’t satisfied with.

When it comes to foreclosures, each house is different.  However, if you look over your options carefully and do your research, then you can find the home of your dreams for an affordable price.  If you are interested in a foreclosure property, give Marie a call at (732) 333-8273.