Buying Foreclosed Homes
What is a Foreclosure?
A foreclosed home is a home the bank owns, in part because the original homeowner was unable to continue making payments on it. Many homebuyers, and those interested in "flipping homes" look to buy these kinds of properties because they're often listed under market value. One of the most important things to keep in mind when buying foreclosed homes is that they almost always come "as is" and may be in disrepair due to negligence from the orginal owner.
Can I Avoid a Foreclosure?
Absolutely. There are a number of ways to avoid a foreclosure, which I have gone over in detail on the short-sales page. In part, a short-sale is when the homeowner lists the home for less than it's worth on the market to avoid a foreclosure. There are many benefits and drawbacks to short-selling a home, but it is often far more advantageous to the homeowner than entering a foreclosure.
Buying a Foreclosed Home
Buying a home in foreclosure can be a gamble. Sure, you're often getting a fantastic price for a home, but there may be hidden risks. Here are some of the benefits and drawbacks of buying a foreclosed home from the bank:
- The bank (aka the lender) has no interest in owning a home, so they are likely to negotiate price, down payment, closing costs, etc.
- The title will be clear, and the new buyer will not take on any of the taxes or mortgage of the old owner
- Inspections and financing are allowed with the normal due diligence
- The property will be listed normally
- The lender will pay back the real estate agent's commision
- The home is sold as-is, and the bank likely will not agree to any repairs
- Additional paperwork is usually required
- Bank may not disclose any damages to the property or prior conditions
Browse Foreclosure & Short Sale Homes on the Market
Interested in a Real Estate Investment?
Work with a real estate agent who has ample experience with foreclosed and short sale homes. I have years of experience in California real estate, including buying foreclosed homes. If you ever have any questions about the foreclosure process, please don't hesitate to contact me.