3 Foreclosure Myths you need to Forget

With so much conflicting information on buying a foreclosure property, it’s no wonder potential buyers are wary of including these homes in their search. Maybe you’ve heard only horror stories of buying a foreclosure, but the truth is that buying these types of properties doesn’t have to be a negative experience. Don’t believe us? Read on for the real scoop on foreclosures as we correct some of the top myths you may have heard.

Myth 1:
Buying foreclosed homes is risky

The truth is…risks are inevitable in any real estate transaction. You can reduce them as much as possible, but there’s risk involved in any purchase. Yes, foreclosed homes sold at auctions come with their risks. Even the risk that you will take on the former owner’s liens and loans alike. However, most buyers are looking for foreclosed homes that the bank owns. These homes are listed in the open U.S. housing markets 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

The truth is…since foreclosed homes are often discounted from the home’s current market assessment, there is some degree of protection from further depreciation. 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

The truth is…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. Pinpointing what those exact investment property costs are can be complicated. They are not always the biggest bargains.

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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