In Denver’s tight real estate market, many buyers are considering distressed properties (foreclosures, short sales, bank owned properties) to help expand their inventory options. If you’re considering purchasing a foreclosure property check out our list of top questions to ask before taking the plunge. There are certainly deals to be found, but these questions will help prepare you for the process.
- Is now a good time to buy a foreclosure?
A real estate agent who specializes in foreclosure sales will be able to gauge the foreclosure climate and help you select the property that best fits your budget and needs. - What are the first steps to take? Get preapproved for a loan before you start looking. If you’re thinking of buying a foreclosure as an investment or second home, understand that financing the home may be more difficult and more expensive than financing a primary residence. Lenders typically charge higher interest rates and require a larger down payment for investment or second homes.
- Can I tell a good foreclosure from a bad one?
Certainly, there are great deals in many markets for both investors and buyers looking for a primary residence. For foreclosure properties, in particular, buyers need to be mindful of unpaid liens, including mortgage debt, taxes, construction loans, home equity lines of credit, and possibly a second or third mortgage. Any or all of these financial obligations could become your responsibility when they purchase a property in foreclosure.
Buying a foreclosure can be a great way for first-time buyers to break into homeownership – especially in cities like Denver with low inventory and high prices. While there are precautions to take, buying a foreclosure isn’t all that much more challenging than a traditional sale. Metrowest specializes in these types of sales – give us a shout today and we can help you start the process.