Foreclosed homes are available at deep discounts, but buyer beware.
Big Cuts on Home Prices
According to the National Association of Realtors, foreclosed houses are selling for about 15 to 20 percent less than comparable homes in the same neighborhood.
Foreclosed Homes on the Market through Next Year
There are a lot of foreclosed house on the market, and there are a lot more to come. Though there are hundreds of thousands of foreclosed listings on the housing market now, banks have been careful to avoid a flood that would drop their prices even further. About five hundred thousand more foreclosed homes are expected to hit the market next year.
Home Buyer Beware
Buying a foreclosed home in a good neighborhood has its risks and challenges. If you are hoping to find the best deal on a foreclosed home, the first item on your to-do list is to find a broker with the best listings. You and that broker will need to make a twice-daily practice of checking for new listings and immediately visiting those new properties. Cold hard cash could pose an obstacle on two fronts, before and after the sale. First, even in this economy, there are still cash buyers who are aggressively looking for deals and will more than likely get the contract before a prospective buyer working with a home loan. Secondly, many of these foreclosed houses are sold "as is" and will require a lot more money after the sale. Beware of deals too good to be true. There's probably an expensive problem waiting for your money after you've signed all the papers.
Home Buying Options
When buying a foreclosed home, you have a few additional home buying options that are unique to acquiring a so-called distressed property: Through a pre-foreclosure sale. At a public auction - a risky option, because you can't tour the inside of the property. Through a bank that has taken ownership of the home – known as a real estate owned property, or R.E.O.
Work with a broker that knows how to find the right home and the best deal for you through these home-buying venues.
Related Articles
- How To Buy A Foreclosed House
- Save Money with a Foreclosed R.E.O. - Real Estate Owned Property
- What are the FHA Loan Requirements?
- What is FHA Streamline Refinance?
- First Time Homebuyers Guide
- Financial Assistance for First Time Homebuyers
- How to Avoid Foreclosure
- What Is Foreclosure?
- Tips on Buying a Home
- How to Sell Your Home In a Down Market
