Dos And Don'ts Of Buying A Foreclosed Home

Posted on: 12 January 2015

If you're looking to buy a home and want to get the most bang for your buck, you may want to consider looking at foreclosures as an option. After all, foreclosed (bank-owned) homes can cost just a fraction of a traditional home. Still, you should be aware that the process of purchasing a foreclosure can be a bit more complex and time consuming, which is why having an experienced real estate agency, like Mac's Realty Ltd, on your side is a must. Furthermore, by being aware of a few dos and don'ts of buying a foreclosed home, you'll be in a better situation to get through the process.

Do Set Aside Money for Repairs

First of all, understand that while you can snag a great deal on a foreclosed home, you'll most likely need to put some money into it before it'll be livable. Often times, when previous owners are unable to make payments and know they're going to face a foreclosure, they'll rip out appliances, cabinets, and other valuable items to take with them. Therefore, you may need to put a fair amount of money into repairs and renovations before you can move in. 

Do Expect a Lengthy Closing Process

Another thing that many people interested in buying foreclosed homes don't realize is that the process can take a long time. That's because, rather than working with an eager seller to close on the home, you'll be working with the banks. Since these banks often use non-local escrow companies, you may run into more roadblocks and delays along the way. Therefore, a foreclosure may not be right for you if you're in a hurry to move or need to be moved by a certain date (for example, the lease on your apartment is ending in a few months).

DON'T Skip the Inspection

Finally, while you probably won't be legally obligated to have an inspection done on the home before you buy it, it's always a good idea to pay the extra money for a professional inspection. When buying a foreclosure, you simply never know what you're getting into without a detailed inspection. Since you're not buying from the previous owners, you don't know what kind of care they took of the home. Save yourself a lot of hassle and money down the road by having an inspection done; if the report comes back with problems, you may even be able to negotiate a lower sale price with the bank.