Has your real estate agent recently told you that there is a foreclosed home that they want you to see? If so, you may be hesitant about seeing a foreclosed home. While foreclosures are often sold at a lower price, it's important to know some issues that can arise with the home so that you are well prepared.
Foreclosures Are Bank Owned Properties
When a home goes into foreclosure, it typically means that the owner of the home is unable to keep up with their mortgage payments and the property goes back to the bank. This makes negotiations kind of tough because you are no longer dealing with an individual seller. It will be incredibly difficult for the lender to negotiate a new sales price with you.
Foreclosures Are Sold As-Is
Do not expect the lender to make special exceptions about things that will be repaired in the home. These properties are often sold as-is—and for good reason. The previous owner may not have cared about the home that they were using in the final months that they were living in it, which could lead to some problems that need to be repaired.
It is also possible that the previous owner took as many things out of the home as possible before they left. While it is common for most homeowners to leave the major appliances, such as the refrigerator and stove, the previous owners may have taken those with them.
Foreclosures May Cause Issues With Getting A Mortgage
A foreclosed home may be cheap, but you may have a harder time getting a mortgage due to the state that the home is in. Expect your mortgage lender to be more critical of the home that you are buying. Since a foreclosed home may be in worse shape than a home being sold by its owner, a mortgage lender is going to want to know what kind of home you are buying. This is because if you also end up in foreclosure, your lender is going to have to deal with selling the property. They want the home to be in good enough shape so that it's easy to sell.
While all of these things may cause you to be wary about buying a foreclosed home, it is possible to find a real gem at a good price. Ask a real estate agent for assistance or more information about buying a foreclosed home.