What You Need To Know Before Buying A Foreclosure
If you’re shopping the Southern California real estate market, it’s no surprise that home prices keep going up.
But what are your other options if your goal is homeownership?
It’s at this point that many people in the home buying process start thinking about foreclosures. You may get dazzled by the seemingly low cost of these properties, with dreams about how you’ll renovate that rundown space into a dream home.
In reality, it’s important to be fully prepared when buying a foreclosure and to be vigilant for signs of worse things to come.
Repairs Can Be Costly
Let’s say you’re buying a single-family home in Los Angeles County. When you have a home inspection during a regular real estate deal, you’ll find out as much as possible about what is wrong with the property, what needs to be fixed, and what you can get the seller to pay for. If there are too many surprise costs, you can walk away.
Now say you’ve found a similar-sized home in foreclosure going to auction that costs half as much. You somehow manage to outbid the real estate professionals, and now own a home that you’ve discovered needs to be completely gutted, making your savings zero – or less.
Look For Bank-Owned Properties
Buying a home at auction is best left to professionals, but you may be able to access the same savings by purchasing a bank-owned property. This process looks much more like what you can expect when buying any house, and you can have an inspection and even enter into negotiations with a bank to reduce the price further.
Consider Current Tenants
Maybe you’ve found a home in foreclosure in Riverside County, and it seems to be in good enough shape that people are living in it. Whether they’re the current owners or tenants of the owners, they know that their time on the property is limited – and they don’t stand to lose anything should it fall into disrepair. Beware vandalism, unpaid bills or liens, or even just a lack of maintenance as signs of a potential problem.