The slump in the housing market has forced many homeowners to foreclose or short sell their houses. There are thousands of such houses in each city. If you are looking to buy a new house, you should consider the foreclosed and short sale homes as well. You will generally find them for a lower price. However, you need to be aware of several factors before placing an offer for a foreclosed home. Here is some popular expert advice:
Most foreclosed homes are in a bad shape. The price of the house is only one of the aspects. Make sure you have the money for all the repairs and fixes.
Unlike a regular house on sale, the previous owner of a foreclosed home is usually the bank. And the short sales homes are owned by individuals that are looking to move out of the house for various reasons. They will rarely offer you upgrades and additional incentives. You basically get what you see.
If you are looking to buy a foreclosed home for investment purposes, you should also check out the renters market in the area. You will need to find a tenant quickly; otherwise you will be required to pay the mortgage from your pocket. Even a small amount can lead to financial stress in the long run.
If you are buying the house in another state or city, make sure you visit the place and check the neighborhood and city yourself. This will help you avoid surprises at a later stage.
Make sure the house is located near good schools. This can be important for your family. It can also be an important criterion for prospective buyers and renters of your property.
Check how long the house has been empty. Houses that have not been occupied for a long time can be infested with bugs and pests. The sewage and plumbing lines also get damaged over time. You may be looking at thousands of dollars in repairs under such circumstances.
Talk to a professional home inspector. Have him come over to look at the house. Have everything checked including the pipes and the power supplies. The house may not be in perfect, turn-key condition. However, the damage and the repairs should be reasonable and manageable for you.
If you are not an investor, and are looking to buy a foreclosed home for your personal use, hire a real estate agent who specializes in them. He or she will help you negotiate with the bank and offer you the best price.
Also, it could take a very long time to get the bank to approve your purchase, in some cases up to a year. If you’re OK with that then by all means do it. If not, you might be better of just looking for a good house in the regular housing market.