Before we even contemplate whether buying a foreclosure property is profitable or not, let’s understand what foreclosure property is. A foreclosure on a property occurs when the lender takes repossession of the house from the borrower if they fail to make payments. These houses are put on for sale at public auction and the one who makes the highest bid gets the house. Now you might be wondering where the problem in such dealing is. The bidder has to purchase the house in the as-in condition which means he will get the title of the house along the taxes, liens and other encumbrances that are on the house.
Although many investors make huge savings by purchasing a foreclosure property this market is for not for amateur house hunters. There are many reasons why buying a foreclosure property can be one of the biggest home purchasing mistakes. Let’s find out some top four reasons.
The property may be occupied
Most often a foreclosure property one purchases are pre-occupied. The previous owner, tenant or renter might not be willing to evict the place. Getting them evicted is very difficult. You might even have to take help of a professional or consult an attorney to aid you in getting your new property.
The home won’t be inspected
Many a time buyers don’t even have a chance to check the house before making the purchase. This makes investing in a house even riskier. A buyer wouldn’t know what he is investing in. It might be until too late that he realizes the investment isn’t worth. Most foreclosure home available in the market is in bad condition. Its fixtures and appliances might be out of the place or missing. In case the house is empty for long, it might need significant repair on its roof or kitchen.
If you are considering buying a home at a lower price, bank-owned or real estate owned properties could be your best bet. With REO and bank owned property, you can know if any outstanding issues need attention and inspect the house before finalizing the deal.
There could be delays
If you wish to buy a house and move in immediately, then don’t invest in foreclosure property. The process of purchasing a foreclosure property is very complicated and time-consuming. The waiting period to close a deal varies from state to state. In case you choose to buy a foreclosure property through a bank, you might need to get many approvals and involve in endless paperwork. Missing out even one signature can stop the sale. Often, closing a deal can take weeks or months due to post-sale legal complications.
Many real estate companies that offer we buy houses cash in Virginia service also provide consultation services in the matter of foreclosure properties. If you have made your mind to buy a foreclosure property, it is advisable to consult them.
It might not be a bargain
With all the encumbrances, liens, taxes to be paid and repairs to be made, you might soon realize that buying the foreclosure property is nothing but a bad investment decision. You would quickly realize that sell house fast Virginia and other such traditional real estate market would have been the best option for you to buy a house that is well in the budget and in a ready-to-move condition.