3 Common Foreclosure Myths Debunked

There’s a lot of conflicting information out there when it comes to buying a foreclosure property. Maybe you’ve heard only horror stories about buying a foreclosure, but the truth is that purchasing these types of properties doesn’t have to be a negative experience. Here we’ll debunk some of the common myths you may have heard when it comes to buying a foreclosure.

Myth 1: Buying foreclosed homes is risky
Risks are inevitable in any real estate transaction. While foreclosed homes sold at auctions come with their own set of risks, most buyers are looking for foreclosed homes that the bank owns (referred to as bank-owned or real-estate owned properties.) These homes are listed just like any other “normal” home. Realistically, these homes are no riskier than any other non-foreclosure homes.

Myth 2: Foreclosures are more likely to lose their house market value than the typical investment property
Since foreclosed homes are often discounted from the home’s current market assessment, there is some degree of protection from further depreciation. The loss of house market value is dependent on the local real estate market dynamic. It’s not dependent on whether or not it was a foreclosure at the time of purchase.

Myth 3: Foreclosed homes are always a bargain

Lenders are trying to maximize the returns on foreclosed homes. These days, those same lenders are starting to offer even larger discounts to buyers to get the property off the books. You will find, however, many foreclosed homes need some serious repairs. When you factor in the costs to make a foreclosure home livable, they may not end up being the biggest bargain.

Ready to start checking out foreclosure properties in the Denver area? The first thing you’ll want to do is find an experienced pro who can help you start the process. Give Metrowest a shout – we specialize in these types of sales and would love to work with you!

Ken Blevins

About Ken Blevins

Ken Blevins, CEO of Metrowest Real Estate Services, is a veteran in mortgage and default servicing with more than 24 years of experience in collections, foreclosure/bankruptcy, loss mitigation and real estate disposition (REO). Blevins was an original co-founder of Metrowest in 2003, a Real Estate Brokerage and Services Company focused on the resale, recovery and liquidation of distressed real estate in Denver, Colorado and surrounding metros. Blevins assumed the role of CEO in January 2014 and provides strategic direction and has management accountability for the day-to-day operations. Under his direction, Blevins drives all default management operations to maximize asset value recovery and reduce loss severity through a strategy focused on customer service and state of the art technology. Blevins has 18 years of direct operational experience in all facets of REO Asset Management having managed large national REO Disposition contracts for Fannie Mae, Freddie Mac, Wells Fargo, JP Morgan Chase, CitiFinancial, GMAC Mortgage and other various financial institutions. Blevins specialties include REO asset management, real estate investment, bulk REO acquisitions and distressed asset recovery and liquidation, and he has directed the resolution and liquidation of over ten billion in institutionally-owned residential real estate.

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