Foreclosures - Myth Vs Reality
The sheer number of foreclosed homes that are available (and that continue to hit the market every day), as well as their discounted prices, make them desirable for owner occupants and investors alike.
If you talk to home buyers, which I do every day, there is a common perception that foreclosed homes have been damaged by the previous owners and that significant amounts of money will be required to repair this damage and make the home livable.
While this is true in some cases, I can tell you from experience that the market is rife with foreclosures that are nearly move-in ready.
Many of these homes are only a few years old, thereby making them even more attractive to the prospective buyer.
What generally happens, however, is that foreclosures in good condition don't stay on the market for very long.
In addition, because they are so desirable, there is usually competition for these homes.
Don't be scared off by that either! If a multiple offer scenario exists, it usually means that the property ends up selling at (or sometimes above) the listed price.
Keep in mind, however, that the foreclosed home is normally selling at well below the market price anyway and with the exception of some paint or carpet replacement, a buyer won't have to sink large amounts of cash into repairing the house.
With that being said, even at list price, a buyer will get a great deal on a house that provides immediate equity.
It requires quick and decisive action on the buyer's part, along with all the requisite financial requirements in place (a pre-approval in hand).
With these types of deals, you don't get a lot of time to "mull it over" before you decide to make an offer.
Don't worry, however, as you will still be able to have the home inspected if your offer is accepted.
Foreclosures are "As Is" purchases, but if your home inspection turns up a problem that you anticipate would be cost prohibitive, your purchase contract provides for the buyer to terminate the contract and have their earnest money refunded.
Just be advised that should the home inspection find issues that you will accept, you will not be able to ask the seller to make repairs or provide a credit at closing.
So, if you're considering a foreclosure, don't be apprehensive.
Contact your local real estate professional, give them your buying parameters and let them work for you to find that perfect home.