With the housing bust associated with the recession of 2008-2009, there are plenty of Central Ohio properties that are vacant. In fact, many of these properties are still in foreclosure, or there are many other homes that may be foreclosed for other reasons as well. If you’re considering whether to make an offer on a property in your area, consider the process, benefits and downsides to purchasing a foreclosed home below.
Buying From the Bank
Buying a home is a major investment for anyone, regardless of if the property is in foreclosure or not. Oftentimes, foreclosures are now in the hands of a bank or lender. This can be a huge benefit, because the bank doesn’t want to hold on to the home, it wants to sell it as soon as possible. So you can usually negotiate the price, closing costs, or down payment to be lower than you could with a normal home buy. The downside to this is that it’s usually an as-is sale, so you can’t expect any repairs to be completed.
Inspecting the Property
While some foreclosures can be diamonds in the rough, some have a lot of fixing up to do. Often, previous owners left the house a mess and with a lot of issues. A quick glance at foreclosures cannot be the rule. In fact, these properties should be inspected in great detail. Your agent might suggest a specific inspector when you narrow down your options that has a lot of experience examining foreclosed homes. These professionals look at every major system, from electrical to HVAC, in order to verify the stability of the sale. If any property has an issue, the inspector will find and isolate it before the sale goes through so you can be fully informed and negotiate down. The upside of this is that you can completely re-do your home to be perfect for you, and get it at a lower cost than a turnkey home.
When it comes to foreclosures, this property may not necessarily be your primary residence. Some people invest in foreclosed homes to flip them and sell them in the regular marketplace later on. You may want to consider a cash purchase if possible on these homes. Banks want to move the properties as quickly as possible, and if you offer cash it will give you a better chance of getting the home if there is a bidding war. Cash sales ensure that the property is completely sold to a given party. The price may also drop with a cash sale so that it can be completed in a timely manner.
As a property is about to be sold by a bank, other investors may swoop in with counter offers. It’s simply the nature of the business, and can be an unfortunate downside to purchasing a foreclosed home. Think about your financial range, and how much you want to spend as a maximum value. A bidding war can get expensive if you aren’t careful about budgeting and get emotionally invested.
When you’re in the market for a home in foreclosure, partner with an agency that specializes in your region. Berkshire Hathaway HomeServices Crager Tobin Real Estate focuses on Central Ohio properties and we have years of expertise helping homeowners buy and sell homes in the area. Whether the home is in foreclosure or listed as a standard sale, you have experienced agents by your side for every step of the process.