If you’re a buyer and thinking about purchasing a foreclosure, be sure you have checked out the pros and cons of this type of transaction first. Buying a foreclosure takes careful budgeting, the right real estate team and the mental  willpower to see the deal through.  If you are buying a foreclosure, you are either buying it from the foreclosure auction or through a real estate agent.  The foreclosure date in Texas is always the first Tuesday of every month.

Positives

Getting A Good Deal – One of the biggest reasons to consider purchasing a foreclosure is for the potential of a good deal.  The foreclosing lender does not want to hold onto the property and does not have any type of emotion towards the property other than needing to get it sold and off their books.  They may be willing to let the property go at a discount depending on condition and how long it has been on the market.

Repairs May Be Minimal –  Often of times you can find a foreclosure property that is listed several thousands of dollars below market value and need very little maintenance/repairs.  Often times paint and maybe carpet (cosmetic items) is all a property needs to be brought back to life.  Most home owners do those updates anyway to some degree.

Building Wealth – This corresponds with getting the property below the market value.  By purchasing an inexpensive foreclosure, buyers can have an advantage building wealth.  If the property appreciates and you decide to sell, your investment could yield some serious profit.

Negatives

Cash Only –  If you are buying a foreclosure at a local foreclosure auction, more than likely you are required to pay in cash (the same day) or some type of certified funds, and will not get the opportunity to inspect the home until after you have it purchased it.

Strings Attached – When buying from the foreclosure auction, you must do your research.  Get with a local Title Company to help you run a preliminary Title Report to see if there are any existing liens attached to the property.  You may be put in a situation owing the old debts associated with the property.

Not Able To Finance – Foreclosures usually sell in “as-is”  and are often in poor condition.   Because of the condition some lenders will not provide financing to the home unless certain repairs are completed.   Getting repairs completed by the foreclosing lender can be a challenge.

Repairs May Be Major –  Often times foreclosures are in poor condition and require work.  It’s not uncommon to see a foreclosure looted by vandals, holes kicked in the walls, appliances missing and all kinds of other little surprises waiting to be uncovered.

At The Banks Mercy – When purchasing a foreclosure the buyer has limited control over the purchase.  There are certain terms and red tape that the lender requires.  That could be requiring the buyer to provide a pre-approval from their preferred lender, additional paper work, buying the home as-is, closing dates of the banks choice, etc.   Prepare to be flexible.

If you are looking to buy foreclosure properties or would like to obtain a list of available foreclosures in your area, pleas call us at 512-277-5455 or email us at info@realestatemitigators.com