It is always good to try and get the best deal for your money. Buying foreclosures means that you are getting a great deal, usually at a really low price. This way you can save a lot of money just by buying property. While this is essentially true, there also some potential downsides to the whole deal. So, there are good sides and bad sides of the deal, so you should think about them first before buying foreclosed property. Buying a foreclosure does include some risks, and disadvantages, but most of the times it’s worth it.
Advantages:
The most obvious advantage of buying foreclosures is the low price. This means that you can buy more property for your money, or you can repurpose your money (spend more money on remodeling the house for example). That’s because foreclosures are most commonly priced below the market value. The prices are that low because the financial institutions that take over foreclosures want the property sold as fast as possible. This way more buyers show their interest, and the companies selling the foreclosures get a greater number of offers.
First-time home buyers can benefit a lot from buying a foreclosed home. The main reasons for this are the lower down payments. The down payment may act as a great obstacle when you’re buying your first home, but since foreclosures have lower price tags, they also require a lower down payment. And since the down payment is usually 10-20 percent of the home purchase price, it can mean a lot to the buyers.
Buying a foreclosed property can give the buyer the opportunity to move to a nice, high-priced neighborhood. Instead of buying a small house in a good neighborhood, the buyers have the chance to buy a larger, more comfortable house. This is very practical for families with kids. On the other hand, if you buy a cheaper house in a wealthier neighborhood, you can make some profit by selling it a few years later, when its value (sometimes even dramatically) rises.
Disadvantages:
When buying a foreclosed property, you will have to face some time-wasting procedures, which will probably get on your nerves. Unlike traditional property purchases, you have to follow specific procedures and go through some tiring “obstacles” which can sometimes catch you unprepared.
Also, when you are buying the property at an auction, you must have the money to pay the down payment (usually 10-20%). You must also be prepared to show a proof that you have the money, or you won’t be able to buy the property, even if you were the highest bidder.
However, some risks that a foreclosure purchase carries can be quite more annoying and disappointing than the procedure itself.
The purchase of a foreclosure often brings a lot of hidden taxes that you will have to pay before you take ownership of the property. Sometimes, buying the property at a lower price will not pay off in the end. This means that there is a chance that you would have to pay more than just the price of the property.
The biggest risk, that can probably cause the most worries, is that you buy the house “as-is”. You will have to fix the damages on your own, and pay for the repairs out of your own pocket. If you are unlucky, it can cost you a lot more than you can handle, so you need to be careful not to get into a mess like that. That kind of event can extinguish the enthusiasm you had when you were buying the property.
The saddest and most unwanted event that could happen to you after the purchase of a foreclosed property, would happen if the previous owners ever came back to try to claim their right to the property. Even though you can solve this problem, you can have a hard time getting them off your property. This can upset you and your family, as it’s a difficult, emotional, and nerve-wrecking event.
There are some great foreclosed homes for sale in Chattanooga, as well as foreclosed homes for sale in Salt Lake City Utah, and Tennessee foreclosures all around, but don't forget Ogden homes and Sandy homes and Draper Utah Homes with the potential of a great deal for a foreclosure as well.
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