Purchasing a foreclosed home is often an exciting opportunity for buyers who may have otherwise been unable to afford a home, however, for some it is simply an investment opportunity to acquire, flip and re sell the property. Just as many buyers may have different hopes for the property they are purchasing, there are also different ways that you can purchase a foreclosed property. One seems to be geared more towards investors and one seems to be geared more towards those who wish to occupy the house as a home.
Related: The Single Biggest Mistake Homebuyers Make
Bank Owned Foreclosures
Bank owned foreclosures are generally the way that buyers who hope to occupy that property will go about purchasing the home. While this doesn’t mean that you won’t have an uphill battle to fend off investors, by purchasing a bank owned foreclosure you are able to go about a generally “normal” buying process.
While the timeframe may be a little longer than non-foreclosed homes, and you may have to budget for large repairs, cleaning or upgrades, the actual process of purchasing the homes isn’t extremely different from that of other homes being sold in your area. Keep in mind, purchasing a foreclosure, regardless of its condition, is often a much more competitive market than other homes, so you may be house hunting longer, or receive multiple offer rejections before entering escrow.
Related: What Risks are There When Buying a Short Sale?
Going once… going twice… sold! Yes, you read that right, you can purchase foreclosed properties at auction. While there isn’t necessarily a “rule” stating that home buyers can’t purchase a home this way, auctions are generally where you’ll see professional real estate investors hoping to snag their latest project. There are a few key reasons why many buyers choose to avoid auctions, however the three most common include:
- Purchases must be made in all cash
- You’ll be competing against professional real estate investors
- Purchases are made sight unseen
Because of these few key factors that surround buying a home at auction, it is easy to see why many people choose to search for foreclosed homes that are bank owned vs. selling at auction. Regardless of what type of home you are hoping to purchase, whether a foreclosure or not, it is important to discuss your options in depth with a trusted agent or advisor so that you are able to explore all of your options and what they could entail.
If you’re currently searching for a new home regardless of if it’s a foreclosure, are ready to sell your home, or have any questions regarding either Medina Real Estate or New York Real Estate, please feel free to contact our office at any time.