Foreclosed homes are sold at prices that are way below the market value of similar Castle Rock CO homes in a particular area. While this may sound really great and attractive option for a first time home buyer who wants to save or to a property investor who aims for profitable returns, there are risks involved in buying foreclosed homes.
1. Repairs and maintenance - The seller is not responsible for any problems, renovations, repairs, or upgrades because the home is sold 'as is'. So if you want to buy a foreclosed home, ready your budget to do some home maintenance and repairs. Foreclosed homes are not always in good shape. In fact most of them are in poor condition. Since these types of homes are sold 'as is', the buyer will surely inherit all problems like leaky roofs, broken windows, damage water pipes, dirty tiles, or worst termite-infested foundation.
2. Money down - Remember that there are different kinds of foreclosed properties depending on which stage the property is. If a home didn't make it in the pre foreclosure stage as a short sale, it will be sold in an auction. Take note that the purpose of auctions is to get as much money for the foreclosed property. What's worse is that you can't even conduct a home inspection so there is a chance that you end up purchasing a beautiful but in poor shape home. Auctions require property buyers to pay immediately upon closing the bid. Since there are other bidders where the highest bidder gets the property, you may end up paying more for a property.
3. Run-down locations - Location is one of the criteria in choosing a home so be careful in buying a foreclosed property because you may end up in neighborhoods with high criminal activities. While there are foreclosed homes found in affluent neighborhoods, some are clustered together in badly maintained neighborhoods.
4. Taxes - Yes, you heard that right. A badly shaped foreclosed home sold for $7000 could have real estate taxes to hundreds or thousands of dollars every year. Even if you have purchased a foreclosed home way below the market for a given area, your real estate taxes can still exceed the purchase price of your home.
Foreclosed homes have a lot of rewards and its price is just one of them. Nevertheless, home buyers and investors should not overlook the other side of the story - the disadvantages.
1. Repairs and maintenance - The seller is not responsible for any problems, renovations, repairs, or upgrades because the home is sold 'as is'. So if you want to buy a foreclosed home, ready your budget to do some home maintenance and repairs. Foreclosed homes are not always in good shape. In fact most of them are in poor condition. Since these types of homes are sold 'as is', the buyer will surely inherit all problems like leaky roofs, broken windows, damage water pipes, dirty tiles, or worst termite-infested foundation.
2. Money down - Remember that there are different kinds of foreclosed properties depending on which stage the property is. If a home didn't make it in the pre foreclosure stage as a short sale, it will be sold in an auction. Take note that the purpose of auctions is to get as much money for the foreclosed property. What's worse is that you can't even conduct a home inspection so there is a chance that you end up purchasing a beautiful but in poor shape home. Auctions require property buyers to pay immediately upon closing the bid. Since there are other bidders where the highest bidder gets the property, you may end up paying more for a property.
3. Run-down locations - Location is one of the criteria in choosing a home so be careful in buying a foreclosed property because you may end up in neighborhoods with high criminal activities. While there are foreclosed homes found in affluent neighborhoods, some are clustered together in badly maintained neighborhoods.
4. Taxes - Yes, you heard that right. A badly shaped foreclosed home sold for $7000 could have real estate taxes to hundreds or thousands of dollars every year. Even if you have purchased a foreclosed home way below the market for a given area, your real estate taxes can still exceed the purchase price of your home.
Foreclosed homes have a lot of rewards and its price is just one of them. Nevertheless, home buyers and investors should not overlook the other side of the story - the disadvantages.
About the Author:
Don't bite more than you can chew. Foreclosed Reisterstown Homes for Sale are great options for wise buyers who new both sides of the story. Visit Real Estate in Suffolk VA for more home buying advice.
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