Buying bank-owned homes may seem a great deal for buyers willing to take risks. If the right decisions are made, foreclosure properties provide a good opportunity to save extra cash.
Before putting your hard-earned money on a foreclosed home, here are important notes to bear in mind.
What is a Foreclosure?
A Foreclosure happens when a mortgage lender has taken a property after the borrower defaults on their mortgage. The foreclosure also occurs when the mortgage borrower has fallen behind on payments. Under either of the above conditions, the mortgage lender will try to recoup as much of their investment. This is through the sale of a foreclosed home, but at slightly less than the market value.
Foreclosed Property is sold As-Is
The mortgage lender is in the business of lending money to earn interest. Therefore, the primary objective is never to maintain the property. Owing to this, the property is sold as it is.
If you are interested in the purchase of foreclosed homes for sale in Saint George Utah, do not expect the bank to repair any damages on the property. This is regardless of the nature of the damage.
Before making an offer on foreclosed homes for sale in Utah, ensure you conduct an inspection. Note that if you purchase the house without making an inspection, the bank will not come back to provide financing for house repairs. Thus, hire a licensed home inspector who will inform you of the condition of the property.
Foreclosed Properties May Take Longer to close
Compared to the new homes for sale in st. George Utah, the bank-owned properties may take a longer time to close the deal. Note that the bank may also counter your offer to purchase the property.
Consider that the asset managers at the bank have backlogs of work. thus, getting everything done will take time. Moreover, they are dealing with more than one foreclosure.
Just because it is a Foreclosure, It doesn’t mean it is the Best Deal
The assumption that all foreclosed properties are available below the market value is wrong. When listing a foreclosure, the objective is to recover the amount borrowed by the property developer. Do not be surprised to find that some properties are listed at higher amounts than the current market price.
To ensure you do not overpay on a foreclosure, consult a valid property valuation officer. Your buyer’s agent can assist you at the property valuation stage. Be sure to factor the cost of completing the necessary repairs when quoting on a property facing foreclosure.
Now you know the important facts to be aware of before you purchase a property that is listed as a foreclosure.
This is a good time to look at some of the advantages of purchasing a foreclosed property.
- You may purchase the property at a relatively low purchase price
A huge benefit of purchasing a bank-owned property is sealing a great deal on the property. If you are in the market for affordable St. George homes for sale, consider negotiating with the bank for one of the listed foreclosures. Remember that the primary objective when recovering a property is to recoup the money that they had lent to the borrower.
- Comes with the advantage of buying in a neighborhood that is otherwise out of reach
Are you interested in purchasing Saint George homes for sale? The high prices of properties within Saint George may keep you from purchasing the property. Why not take advantage of foreclosed homes for sale in St. George Utah. Negotiating for a lower price on these properties ensures a more affordable deal.
- Provides a Chance To Capitalize on Seller Concessions
In some cases, the owner wants to sell the property quickly in order to save some money before the bank disposes it at a lower price. Under such circumstances, you may request the seller to share the closing costs, which makes the property more affordable.
Purchasing a foreclosed property comes with the advantages we have highlighted. However, there are disadvantages that come with buying a foreclosed property. Here is an overview of the disadvantages of purchasing a foreclosed property.
- Requires Cash Payment if Buying at an Auction
If you are purchasing a foreclosed property at an auction, forget about applying for a mortgage. Auction purchases are paid for in cash.
- You purchase the Property as it is
Another disadvantage of purchasing foreclosed properties is that you pay for the property as it is. Therefore, all repair costs and modifications will be an additional out of pocket costs.
Whereas purchasing foreclosed properties come with advantages, there are disadvantages too. It is advisable that you consult a qualified buyer’s agent before purchasing a bank-owned home for sale in St. George Utah. Moreover, ensure property inspection and valuation have been done if need be.