“That home is in foreclosure.” You get an immediate mental picture of an overgrown yard, and falling down house or angry owners who are resentful of the foreclosure and trash the property. Sure, this is true of some foreclosures but not all.
The biggest caveat when buying a foreclosure home is that it is typically sold as is, which means the bank is not going to fix any problems. And unlike a normal home sale, in which disclosure requirements force owners to reveal a home’s every flaw, there’s no such legal stipulation in a foreclosure.
Since banks are often eager to unload these properties, they aim to break even with an asking price that’s typically the sum of the remaining mortgage note plus interest, lawyer fees, and penalties. On average, this ends up totaling about 15% below the home’s actual value—and homes often sell for less than asking price.
Realtor.com offers these suggestions if you are considering purchasing a foreclosure.
- Research how long the home sat vacant, whether it endured freeze and thaw seasons unattended, or experienced anything that may have caused significant structural damage.
- Hire a home inspector to thoroughly check out the home for major problems. Have the inspector give you an estimate of how much money it will take to make repairs. Click to read entire article.