Is it a good thing or a bad thing to buy a house that's in foreclosure?
Question:
It depends on what you purchase for; ie., investment or as your home. If as investment, you have to realize then that the property may not be in the best condition. Most homeowners who can not pay the mortgage, tend not to pay for maintenance items either. As long as you have a budget and the property fits within your guidelines, then, there are only pro's to buying this kind of property.
If however, you plan to live in this home, you will find that most are in pretty rough shape. As I mentioned above, most have lack of deferred maintenance, if not destroyed by homeowner before the vacated the property. But if you or someone you know is handy, and has the expertise to remodel, repair a property like these, then it may be a dream of a lifetime.
Perks to owning any real estate is the tax advantages for you. Besides providing shelter. Flipping isn't as easy as it sounds. You really need to know what you're doing. TV makes all things look pretty easy and good. So Beware.
The only real perk is that you *might* get a good deal because the owner is anxious to sell to avoid the foreclosure. The disadvantages: if the house has already been foreclosed upon and is being sold by the bank, but the previous owners have not vacated the premises, you might have a very hard time getting rid of them; you might not get as good a deal as you are expecting to, as people get very "emotional" at real estate auctions and drive up the bidding because they "really want to win;" and the home may have a lot of hidden expenses like unpaid water bills that will transfer over to the new owner.
If you want to investigate foreclosures, make sure you set an absolute maximum sales price limit and stick to it, no matter how exciting the auction bidding might get, and research any tax leins, water bills, etc to find out which ones you would be responsible for.
Pro: lower price (to avoid foreclosure, so the owner gets SOMETHING for it)
Con: lack of ability to negotiate problems found, probable worse condition of dwelling
If your able find out if the prior mortage was assumable.Mines was so I basicaly took over the principal amount due.
Depends on what shape the home is in and what price you can obtain it for. A lot of foreclosures today were maxed out at purchase, so you really wouldn't be getting a great deal. Also, the condition of the property will be a consideration. A lot of times when people are getting evicted, they don't take such good care of the home, or worse, so looking at the property before you try to go ahead will be crucial. Find out as much information as you can about the property prior to bidding, and if the sale price is below market value, and in good condition, then yes you in a good position, just do the homework involved. Good Luck!!
Buying a house in foreclosure is a good thing if you know what you are doing. The perk is that if you purchase right you normally can get a house below market value.
The question is do you have the knowledge to purchase a foreclosure?
Do you know the best stage of the foreclosure procedure in which to make the best possible deal for yourself and those that are in foreclosure?
Then you have to be able to find a list of those that are in foreclosure, get to them before all the investors, lawyers, and mortgage brokers so you can make your pitch to the owners if this is th phase you want to find the foreclosure.
If you really want to purchase a foreclosure I would suggest you go to your local book store and purchase a book on buying foreclosures. This will help even if you only want to purchase a home one time.
If someone is advertising foreclosures for sale in the paper they are buying them and placing them back on the market for a profit. You can still get a good deal in some cases.
If a real estate agent is advertising he is selling foreclosures, in most cases he is not really selling a foreclosure. What he is selling is an Real Estate On Hand (REO) from a lender. They are trying to get the maximum value for the property at this stage.
I hope this has been of some help to you, good luck.
"FIGHT ON"
Each property is different.
If the house is in foreclosure in CA then you need to realize you are buying from the owner (maybe resident owner). The owner might be very emotional and difficult to deal with.
You are generally buying as-is. When someone can not pay their bills they are very likely not maintaining the property. Expect issues and try to do a through inspection.
If you buy at auction then you have to bid with all cash.
If you buy from the lender after the trustee sale (process used for most foreclosures in CA) then expect that the property might have been vacant for a period and therefore could have had other damage. Most REO property is listed so the lender knows that the property was marketed correctly.
Perks? No. Good deals? Some of the time. Each deal will be different so Do Your Own Research (DYOR).
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