Considering Foreclosure Property?

Dated: 09/08/2020

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What is a Foreclosure?  

A legal process in which a lender attempts to recover the balance of a loan from a borrower who is in loan default. The force of the sale of the home is used as collateral for the loan. 

Is it a good idea?

This can be great for investors or for a quicker path to home ownership. Many people think they will get a great deal buying a foreclosure. Sometimes it is true, but there are also potential issues. Here are just a few of the pros and cons.

Pros

  • Property will be listed for outstanding balance owed to foreclosing mortgage holder.This means you might get a foreclosed home at a great price, and speed your path to home ownership. 

  • Property is usually on the MLS and bank will pay the agents commision

  • Foreclosure homes are vacant

  • Less title concerns. Bank clears title for you

Cons

  • As Is Sale. You will not be able to ask for repairs

  • No Disclosure. You will not be able to find out the history of the home

  • May have to wait for the price to come down as most bank don't mind the property sitting on the market for a long while as the gradually lower the price until they get an offer close to their ask price. 

  • Property might be damaged by upset homeowners

  • In some states, homeowners may have up to 12 months to take back control of their property and is not obligated to pay you for improvements

5 steps to buying a foreclosed home

  1. Find an agent specializing in foreclosures.
  2. Get a preapproval letter.
  3. Look at “comps” before making an offer.
  4. Bid higher if other foreclosures are selling fast.
  5. Be prepared to buy a foreclosure in “as-is” condition.

For more information on how to buy a foreclosed home see this article at Bankrate.com

Jyoti S Young (RS)  is certified for Short Sale and Foreclosure transactions. Curious about what is available on Maui? Click link for a Short Sale and Foreclosure search.

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Jyoti S. Young

Jyoti treats her clients as family and truly is an advocate for them. Her attentiveness, tenacity and passion in real estate stems from her love of people and her desire to be of service. She is a mem....

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