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!