Just getting started in the house hunting process in Denver? Chances are you’re noticing limited availability and high prices. If you’re in the market to buy a home, you may be wary of distressed properties – short sales, foreclosures, bank owned properties, etc. However, the process of buying these homes is a lot less challenging than you might think. Here we’ll clear up a few misconceptions you may have heard along the way. Realizing the tips below may allow you to purchase the right home for your family at a great price.
Myth #1 –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, just like a traditional sale.
Myth #2 – 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 #3 – All foreclosures have expensive 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.
One thing that’s not a myth? Hiring a pro who’s experienced in buying/selling distressed properties. You want experienced professionals on your team – Metrowest specializes in these types of sales and would love to help you start the process!