If you’re in the market to buy a home, you may be leery of distressed properties – short sales, foreclosures, bank owned properties, etc. However, the process for buying these homes may be far less daunting than you think. Here we’ll dispel a few myths you might have heard along the way. Who knows? Perhaps buying a foreclosure is exactly the option you’re looking for!
Myth #1 – you can’t get an inspection on a foreclosure
This myth is only true when it comes to buying a foreclosed property from an auction. However, if it is a real-estate-owned (REO) property, or a U. S. Department of Housing and Urban Development (HUD) home, you’ll actually be encouraged to get a home inspection to disclose problems with the house before making an offer!
Myth #2 – you must pay in cash
This myth can be true in some instances. For example, an auction may require cash for the entire sale price, or perhaps the property may be in such poor condition that you cannot get a mortgage from a traditional lender. On the flip side, many REO properties, HUD homes and many foreclosures at auction may be purchased with a home loan.
Myth #3 – Every foreclosure has hidden costs
A foreclosed home can have hidden costs from needed maintenance. However, you have the option to pay for an inspection on foreclosed properties sold outside of auctions, which will disclose any problems or needed repairs. You can also research the property deed on any foreclosed home to ensure you won’t be held responsible for any liens that may be on the property. One advantage of buying a HUD home or REO property is that HUD is required to clear the title of liens before reselling and lenders typically clear liens as well. You still want to make sure the lender is clearing the title before you buy.
The best way to make sure you find the best foreclosure property for your goals and budget is to hire a real estate pro who’s an expert with these types of sales. Give Metrowest a call – we specialize in foreclosure and REO sales and would be happy to help start the process.