Pros and Cons of Buying a Foreclosure
Foreclosure properties can be filled with hidden surprises and problems, putting the buyer at risk of incurring unforeseen costs. However, they are typically cheaper than a standard home listing, which makes them an attractive option for many looking to buy more house than their budget would typically allow.
Is a foreclosure property right for you? Consider the following list of pros and cons to help you decide:
Pros
- People who are trying to sell properties that are in pre-foreclosure are typically motivated to sell quickly
- Pre-foreclosure home purchase prices are usually below market price
- Because of their motivation to sell, pre-foreclosure sellers may be more open to doing repairs, paying closing costs, or providing other concessions to help the sale happen quickly
- Sellers of pre-foreclosure properties are legally required to provide information about the property’s history, repairs, and condition
- If the foreclosure is owned by the bank, the title will be clear and the house will be vacant
- Bank-owned foreclosures typically allow for traditional financing and inspections
- Banks want their money back, so they are normally motivated to sell and may be willing to negotiate on price
Cons
- Though pre-foreclosure properties are less risky, they typically aren’t quite as good of a bargain as bank-owned properties
- If a pre-foreclosure sale is approved as a short sale, it can take longer to close
- Houses sold at auction are ‘as-is,’ meaning no inspections are allowed
- Bank-owned properties sometimes have extensive damage caused by disgruntled ex-owners before they vacated
Still unsure if buying a foreclosure is right for you? Let us help. With more than 20 years of experience in the Central Florida area, you can trust Butler Mortgage to create a mortgage product that perfectly suits your needs. You can also rest assured that we’ll be here to help you every step of the way, including on closing day. Contact us today at 407-931-3800 or online to request a complimentary consultation.
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