10 Jul Do You Want to Buy a Foreclosure Home?
A common statement that real estate agents get from many buyers, is that they would like to get a “deal” on a home, by purchasing a foreclosed property. Your agent wants you to get a good deal too! But there are certain things to know about purchasing what are known as REO (Real estate owned, or REO, is a class of property owned by a lender—typically a bank, government agency, or government loan insurer) homes.
The first thing to understand is that many REO homes are in need of repair, anywhere from needing new carpet and paint, all the way to plumbing repair, roof replacement or structural issues from years of neglect. The institution that owns the home will not be doing any of these repairs for you, and the property is sold in “as is” condition. Ask yourself if you have the money, time, and/or knowledge to handle any repair issues that might come up.
The second thing to keep in mind is you need to either have cash (in some instances) or a certain type of loan that allows you to buy a home in need of repair. Check with your lender to ask what type of condition the home needs to be in. Certain loan types require the home to have all utilities on, working appliances, functioning heating system, etc. And if you are using first time home buyer grant money, there are even more stringent inspections that the home needs to pass, so an REO would mostly likely not be an option for you.
Yes you can buy a foreclosure home, in certain instances! It can be a good way to get a home at a lower price than normal, due to the amount of work needed, and customize and rehab a home to your own taste. However, due to the time and money involved, it is not the best option for everyone. And you can still get a home in move in ready condition, for a fair price too! Your real estate agent and lender are the professionals to help guide you through the process.
Managing Broker – IL Office