Is buying forclosed Realestate ever a BAD idea?
I mean.. you are almost guaranteed a profit on it right? Since you are getting it below market value?
You are not getting it that far below market value. Unless you are talking about high dollar homes the costs of buying ands selling would eat up the difference
August 26th, 2011 at 2:07 am
You are not necessarily getting it below market value..it is entirely possible that if two parties want the same property, they could enter a bidding war bringing the sale price up to market value. All a foreclosure means is that the previous owner could not pay his mortgage – says nothing about the price of the house on the market.
Also, a significant number of foreclosures have significant damage done to them by the disgruntled ex-owner. The houses are sold as is, so it could be possible that the price of the house plus the cost of the repairs takes the buyer up to or over the house’s value.
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August 26th, 2011 at 2:50 am
I would never ever buy foreclosed properties. Often you have to buy as is with zero warranty and usually the anger of the previous home owners will be taken out on the house. This could lead to tens of thousands of dollars in damage. Also foreclosed properties sit idle for YEARS without anyone maintaining it after the previous homeowners are evicted. There are stories of foreclosed houses turning into drug houses, animals taking up residence and the inside being weather beaten because someone from the bank left the front door and windows up.
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August 26th, 2011 at 3:03 am
uh….assuming you know anything about real estate, liens, judgments, title issues……. no.
Assuming you get really good legal advice and title policy info….
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August 26th, 2011 at 3:19 am
In what aspect?
REO homes are RARELY listed significantly under market value. Those days are LOOONNNNGGG gone.
Homes in foreclosure auctions can have all kinds of liens attached to them – liens that YOU will be responsible for. The houses can be completely destroyed inside. And at this point, most auction starting prices are far above market value. To even touch an unseen foreclosure auction property, the starting bid needs to be somewhere around 1/3-1/2 of market value and you need to have a title search done before you get to the courthouse steps.
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August 26th, 2011 at 3:25 am
there is nothing about a foreclosed property that means you are necessarily getting a great deal . . .
Yes it can be a bad idea for many reasons . .
You may not be getting a good deal
You may be buying in a troubled neighborhood
Property values continue to slide so . . you may be able to pick up a similar home for thousands less in another 6 months
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August 26th, 2011 at 3:44 am
Never buy a property based on how it is owned. Buy the best property – best location at the best price you can find. You may find it is foreclosed- but also it is often not foreclosed. If you were to pay "full price" in a depressed market- and get a great property- then sell it later in a wonderful market- I think you would get a better return than if you bought a piece of junk at a "low price" that will always be a piece of junk.
The most common foreclosures I see are bad houses with horrible locations that have very little value at all. But there are some that are pretty good houses that somehow got foreclosed if you pick thru for a while.
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August 26th, 2011 at 3:54 am
You are not getting it that far below market value. Unless you are talking about high dollar homes the costs of buying ands selling would eat up the difference
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August 26th, 2011 at 4:20 am
Well if it’s falling apart then yes, you need to do a price comparison of the surrounding properties and do your research. If it’s a bad area the property is likely to be cheap but you may have issues selling it. This article might help
http://www.associatedcontent.com/article/8264519/perks_and_pitfalls_of_home_ownership_pg2.html?cat
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