Search Foreclosures

Home loanPros of buying a foreclosure

You may be able to purchase a home at a lower-than-market-value price. If the home is in pre-foreclosure, the homeowner is looking to sell the home to avoid going into foreclosure. These homeowners are usually in a hurry to sell, putting buyers at an advantage.

Banks are also often willing to offer foreclosures at a discount — the longer they hold these properties, the more it costs them in terms of taxes, maintenance, etc.

Foreclosures can be found at all sorts of price points (starter homes, luxury homes, etc.) and sometimes are only in need of minor repair or upgrades.

With some sweat equity, repairs and upgrades, a homeowner can turn a foreclosure into a home and see some appreciation in the property’s value.

Cons

Since foreclosures are often offered at significant discounts, you may face steep competition and bidding from other buyers.

Foreclosures aren’t always offered at a large discount. Homeowners in the pre-foreclosure stage may price a home higher than it is worth in the hopes of paying off a mortgage, taxes, etc. Banks are looking to recoup at least what’s owned on the house, so they may only offer a slight discount.

If you are buying a foreclosed home at an auction, you may have to pay cash (the same day!) and may not be able to inspect the home before purchase.

Some lenders don’t offer loans for distressed properties.

Foreclosures may need serious and costly repair. The previous owner might not have been able to afford fixes for the property and may have allowed it to fall into disrepair.

Foreclosures are often vandalized and looted; it’s not uncommon to find major appliances missing, holes kicked in the walls and other vandalism.

Foreclosures tend to sit vacant for periods of time, which causes major maintenance issues. If a home is not maintained, its pipes could freeze, vermin and bugs could settle in and mold could grow.

You need to do your research — a foreclosure can have liens attached to it. You may find yourself having to pay costly old debts associated with the property.

Foreclosures often are sold as is and banks often aren’t interested in making or footing the bill for repairs.

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