Margaryta Booth Principal Broker

King Neptune Statue on the Boardwalk in Virginia Beach

Foreclosure

Foreclosure: We can Help

With the foreclosures on the rise in recent years, some buyers think more about the opportunity for them rather than the risks associated with buying a foreclosed property. Think hard before you get involved into buying a foreclosed home, especially if it is your first home.

Weigh all pluses and minuses on whether buying foreclosed home is a good opportunity for you and your Family. Owning and maintaining any home is a big responsibility, imagine if you purchased the home with all kind of issues: roof leaking, plumbing, air/heating, electrical systems in despair condition, enough mentioning just some legal concerns about ownership that may rise. It helps to have an experience about the true cost of owning a home beyond the monthly mortgage payment.  Advice of true professionals is highly valued when you deal with that kind of properties!

Plan to Action:

Step 1. Get help of the Experienced Professionals.

To avoid costly mistakes by trying to do it yourself, get help from  experienced professionals who know the foreclosure system very well. Competent Realtor will have the system in place connecting all the professionals together (loan officers, home inspectors, appraisers, investors, contractors) in order to make the sale happen.

Step 2. Evaluate Your Financial Situation.

A foreclosed property usually comes with a lot of defects, which will lead towards unexpected expenses on Buyer’s side:

  • The property most likely will be in a very poor condition because the previous owners were not caring for it; it could have been sitting empty for a while being a target for stealing any valuable pieces that might have been left inside.
  • The foreclosed property may have come with the title encumbered by judgments or liens that you may have to pay off in order to complete the purchase.
  • It is not recommended to buy a foreclosed property for the First Time Home Buyers. If you have a solid equity built in your primary residence, you can use the existing home equity to cover foreclosure purchase costs.
  • Some Cash available as well as low debt and outstanding credit are absolutely necessary for your foreclosure venture.

Step 3. Analyze the Market.

The heavy concentration of the foreclosed properties in the same area is usually the sign of a declining market with the inherent risk of property value going down.

If you are trying to get into the business of investing into the foreclosed properties, be sure that you run all the numbers right. As a beginner, fixing up the place and then resell, you probably cannot count on the profit right away. In areas with bargain foreclosures, home prices may not bounce back for a while. Seriously consider renting the property until the market value of the properties in the area starts going up again.