Source: The Motley Fool —
Although housing inventory has been opening up in the real estate market, there still aren’t enough available properties for sale to meet buyer demand. If you’ve been house-hunting for months and have yet to have success, you may be at the point where you’re willing to consider purchasing a foreclosed home.
When you buy a foreclosure, you’re effectively buying a home a bank or lender has reclaimed because the owner stopped making payments on their mortgage. While there are benefits to buying a foreclosure, there are also some key drawbacks you should know about. Let’s review.
Pro #1: A lower purchase price
Some foreclosures are in better shape than others. But often, when you buy a foreclosure, you’re getting a home that isn’t in the best condition. In some cases, that can mean the home needs a lot of cosmetic work. In other cases, it can mean the home needs serious repairs.
Because of this, you’ll generally pay a lot less for a foreclosure than you will for a standard home.
Pro #2: A chance to put your own stamp on a home
Foreclosed homes often need work, but that’s not necessarily a bad thing. It may be that you have certain design ideas you want to bring to life. It’s harder to justify tearing down a perfectly good home to put your own stamp on it. But if you’re buying a home that’s in poor shape to begin with, it’s much easier to make the case for a complete remodel.