Foreclosure Purchasing

Published by julia | Filed under Buyer / Seller Tips, Miscellaneous, Real Estate

As our country begins to rebuild, one is bombarded with the high number of foreclosed homes that are on the market.  These homes have defaulted mortgages and are either owned by the bank or owned by a realtor who is working to pay off the mortgage.  These homes are considerably cheaper than homes that are not foreclosed, but are they really worth as much?  Are foreclosed homes the way to buy a home, or is sometimes paying full price the way to go?

Many foreclosed homes are in the poorer neighborhoods of the cities.  This is because this is where the recession was felt the hardest.  These are the people who lost their jobs and were unable to find work fast enough to avoid foreclosure of their home.  These are the people who most often are living paycheck to paycheck and therefore did not have enough in savings to cover a few months without a solid income.  There are some foreclosed homes in very affluent neighborhoods as well, but these are rare and often cost quite a bit of money, even as a foreclosure.

While poorer neighborhoods are not necessarily bad places to live, they do tend to be higher in crime and can be more dangerous.  Some of the poorer neighborhoods are simply neighborhoods that are beginning to develop, but most started off well to do and have slipped into decline and disrepair.  The higher end neighborhoods that have foreclosures risk decline but are generally safer and have fewer crimes.

Many people know that their homes are being foreclosed upon.  The banks do not foreclose without warning.  While some take this without damaging the home, many do significant damage to the home before they are forced to remove themselves.  This damage can be both visible and non-visible damage.   Spray painting the walls and ripping holes into the walls and floors is the most common damage done, but some cut wires in the walls or move the shingles to cause leaks.  One must remember to have the house appraised before purchasing the foreclosed home.

Liens and levies can also be one the foreclosed home.  While these are typically on homes that go to auction, they can be on homes that have been foreclosed.  One should research to ensure that there are no liens or levies that one would be then responsible for if they should purchase the home.