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Wednesday, January 04, 2017

Foreclosures often represent a great way to get a fantastic deal on a home.....

The title of this post was taken from an article I read earlier today.    While bank foreclosures often can represent a great way to get a fantastic deal on a home foreclosures are not for every buyer.

More correctly, foreclosures are not for most buyers.
Image courtesy of Stuart Miles / FreeDigitalPhotos.net

Foreclosures are generally not move in ready properties.   Many times they have been neglected, stripped of major components (AC, for example) and even vandalized.  Some have been boarded up for a year or more.  Many have had issues neglected for years before the actual foreclosure resulting in further damage (roof leaks, for example.).

Foreclosure properties are more likely a consideration for experienced buyers, investors and cash buyers.

First of all, cash buyers don't need financing.  Financing most often requires move in ready, non-project properties.  One caveat about financing and repairs...there is such a thing as an FHA 203(k) loan which allows repairs even with financing. Look up FHA approved lenders.

Investors have a purpose beyond living in a property.  Most investors have the funds and experience to evaluate a property, estimate repairs and understand other considerations.  Investors take a business view and are less emotional toward a property.  For investors, it is all about return on investment.

Experienced buyers with available funds and time can find bargains in foreclosures.   Even if a buyer intends to live in a property there is often a period of time between purchase, repairs and habitability.  The reality is most foreclosure properties are not remotely move in ready!

The foreclosure purchase process often involves operating in the dark.   Due diligence takes on additional meaning when dealing with foreclosures as the usual disclosures are usually absent.
The lender/seller will usually never provide any information about a property.

If there is an association it is up to the buyer to find the answers.  Sometimes the electricity and water are unable to be turned on. 

Buying a foreclosure requires extra effort by the buyer.  There can be significant reward going the foreclosure route for the right buyer!

agent@moving2brevard.com


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