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!