Homebuyers often have an entire sea of options when it comes to property acquisition. Looking into foreclosures or foreclosed properties is just a small part of that sea, but potentially a very attractive one, especially if one wants to escape rising realty prices and the effects of inflation.
Buying a home is one of the biggest investments you may make in your lifetime. Naturally, cost is the number one issue that often deters or discourages potential homebuyers. Don’t worry. The real estate industry has several options to help make a home affordable for everyone. Looking at foreclosures is one of these.
What’s a Foreclosed Property?
A foreclosed property is owned and acquired by a bank due to the previous owner’s failure to keep up with their mortgage duties. Broward County real estate foreclosures have proven to be a feasible option for first time homebuyers who usually have a limited budget. Typically, foreclosed properties are often cheaper because they have been pre-owned but this is notabsolute; the price depends on several factors.
There are different stages of foreclosures. Each stage could result in a different value for the property. In the first stage, the pre-foreclosure stage, the homeowner has been issued a formal notice that since they have missed payments on their mortgage, the foreclosure process has begun. The homeowner will then have the option to sell the house as per their asking price, or let the bank take possession of it. A short sale occurs in that phase, making the house cheaper than its usual market price.
In the second stage, the house is auctioned. At this stage, the bank usually allows the highest bidder to have the property. The bank itself may also bid for the property. If in case the property is not sold, the bank will own it by default.
In the last and final stage, the bank puts up the property for sale. It may be sold through a real estate agent or may put it on direct sale.
In any case, purchasing a foreclosed property often comes with a discount. Depending on the current market prices and the actual state or condition of the property, you can get it at a lower price than usual. The bank will not hold on to it longer because when they do, they will potentially lose more money on it. To minimize the possibility of losses in their revenues, the bank will try to sell it as quickly as possible. That’s what you must look out for.
Negotiating with a Good Agent
Consider other factors that may get in the way of your home purchase other than price. You must be aware that foreclosures are usually sold as is. That means careful inspection of the property and accurate evaluation even before you start the purchase process. It’s a repossessed home, after all.
You also have to factor in costs for fixes and repairs or any home improvement projects that you might need to spend on. Of course, that’s on top of the price that you need to pay for the house itself.
Finally, one of the most important keys to ensuring a good deal out of foreclosures is finding a real estate agent who will negotiate while keeping your best interests at heart.
Foreclosures are valuable options that potential homebuyers have in order to purchase a home of their own without hurting their budget too much. But just like with anything, you have to be careful with the purchase, making sure you have factored in everything before you give it a go.