There’s a lot of conflicting information out there regarding purchasing foreclosure homes. Whether or not you’ve heard horror stories or only positive things depends largely on the experience of the person telling you their story. Here we’ll cover some of the most common myths about foreclosures and give you the real scoop on buying this type of property.
Myth #1: Foreclosed homes are ALWAYS a bargain
Truth: 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, though, that many foreclosed homes need some serious repairs. Compare your budget to the amount it will take to fix up a property and you’ll see it may not be a bargain after all.
Myth #2: Buying a foreclosed home is risky
Truth: In any real estate deal, risks are inevitable. 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 like any other ‘normal’ home. Realistically, foreclosure homes are no riskier than any other non-foreclosure homes.
Myth #3: Foreclosures are more likely to lose their house market value than the typical investment property
Truth: Actually, 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 depends on the local real estate market dynamic. It is NOT dependent on whether or not it was a foreclosure at the time of purchase.
Ready to start checking out foreclosure properties in the Denver area? An experienced pro can help you better navigate the waters. Contact Metrowest today – we specialize in these types of sales and would love to help you start the process!