Purchasing a foreclosed home with the help of a mortgage broker in Denver is a great idea in many circumstances. Not only can a foreclosed home usually be purchased at a discounted price, but a purchasing a foreclosure might provide a buyer with the opportunity to own a home in an otherwise unaffordable neighborhood. Buying a foreclosure is mostly viewed as a positive opportunity, but purchasing a foreclosed home also comes with a significant amount of risk. Therefore, it’s important to not automatically assume that buying a foreclosed home is always a good idea or a good deal.
Make sure to evaluate the pros and cons of buying a foreclosed home before making a decision to move forward with the purchase. Also, keep in mind that every foreclosed property is unique and comes with its own set of positive and negative aspects – so each property should be evaluated independently.
Pros of Buying a Foreclosed Home:
- It is sometimes (but not necessarily always) possible to purchase a foreclosed property at a price lower than market value.
- It is possible to find foreclosures in all types of neighborhoods – ranging from condominium complexes to luxury homes worth millions of dollars.
- The owner of a home in pre-foreclosure is often motivated to sell quickly – which can result in a good financial deal for the buyer.
- A foreclosed property can provide a good opportunity for a “fix and flip” situation in which the buyer spends a minimal amount on the home, fixes it, and then sells it for a profit.
Cons of Buying a Foreclosed Home:
- A foreclosed property is often available at a significantly lower-than-market-value price, but this means there might be competition during the purchase process.
- Just because a property is listed as a “pre-foreclosure” or “foreclosed” does not necessarily mean it’s a good deal.
- Sometimes a foreclosure property must be purchased at auction, which means there may not be time to inspect the house for problems before committing to the purchase. Also, auctions sometimes require an immediate cash-in-full payment.
- It is not always possible to obtain a mortgage on a foreclosed property if it has been labeled as “distressed.”
- Owners of a property in foreclosure do not always take excellent care of the home, which means they might leave it in very bad condition. And this type of property is usually sold “as-is.”
Purchasing a Foreclosure:
If you are certain you want to purchase a foreclosed home, just make sure you are prepared. This means understanding that you will be purchasing the property from a mortgage lender or a bank, and possibly with the help of a dependable Denver mortgage broker. These institutions are not as willing to pay for repairs or other concessions that an individual homeowner (not in foreclosure) might be willing to consider. In other words, you get what you get when you purchase this type of real estate.
Keep in mind that you CAN use a real estate agent or broker to help you purchase a property that is in pre-foreclosure or foreclosure. In fact, some agents specialize in this type of property. Buying a foreclosure requires experience and knowledge – which are traits all foreclosure specialists should have.