Is Buying A Foreclosure Right For Me?

Here is a list of questions to help you figure out if exploring this home-buying avenue is right for you.

1. When do I need to move?

• The timeline for foreclosure/lender mediated properties can be unpredictable response times to an offer in short sale or bank owned can vary. You must have flexibility in your closing date to be able to adjust to timeline.

2. How handy am I?

• Unforeseen issues will crop up, especially with seasonal changes will you be able to remedy those issues with sweat equity, or will you need to hire out professional help?
• Do It Yourselfers will gain greater equity than someone who will need to hire contractors.

3. Will city ordinances/lender requirements require me to make large repairs?

• Check city codes some cities require a property to be at a certain standard of condition to be compliant with city ordinances. The lender financing your property may have similar requirements.
• Also be aware of the timelines cities allow for Buyers to make the repairs.

4. How flexible are my needs?

• A Buyer with a wider range of criteria (location, style, condition, timeline) has more options not only for finding a home, but with price as well. If your needs are specific, traditional sellers might be the only inventory available.

5. How important is peace of mind?

• Traditional Sellers will provide the history of the home so you aware of past problems &/or improvements made to the property.  There is also the option to arbitrate or take a Seller to court if you feel there were undisclosed issues with the home within a certain timeline after purchase.
• No warranties or representations will be made with bank owned/foreclosure sales you truly are buying
  “as-is”.

6. Is it REALLY a good deal?

• Foreclosures are not for everyone and you need to ask yourself if the potential headaches are really worth it often times the best “deals” come without any caveats or surprises.
• You will still want to comp out the property to similar homes for sale or sold in the area. You may be able to find a similar home in the area which maybe a little higher priced but not needing all the work.
• Some foreclosure/lender mediated homes are priced below market value and are receiving multiple offers, driving the purchase price up is that home really a “deal” after all?

7. Will I be able to finance this home?

• It is important to find out your lender’s requirements for your purchase you may need special financing on homes needing significant repairs/rehab.
• It is also very important to have qualified and experienced representation to guide you through this type of home purchase. These properties can carry a lot of “baggage” – title problems, unpaid utilities, costly repairs. An experienced Real Estate agent will protect your interests and get your foreclosure purchase CLOSED.