If you’re on the market for a new home, you may, in your research, find yourself asking whether you should consider buying a house that was foreclosed on. It’s a complicated question. Buying a house that is in foreclosure is not the same as purchasing a house on the open market. That’s because it carries with it extra risks that could end up costing you.
Foreclosure Risk: Extra Work
When you purchase a home that is in foreclosure, many times the bank that owns it will sell it “as is.” That’s because they are trying to recoup any losses and don’t want to invest any more money into it. If the property is being foreclosed on, rather than in the short sale process, the likelihood of vandalism increases. What all of this means is that you will need to consider how much time and money you’ll need to spend fixing up your new home.
Foreclosure Risk: Extra Fees
While foreclosed prices are below market, some of the money you save will have to go toward transaction fees. Potential fees that you may end up having to pay include negotiator fees, back taxes, and other past due fees, such as homeowners association fees. Many of these fees are not part of the public record, so be sure to do your homework. Fortunately, some states limit what you would be liable for as a buyer.
Foreclosure Risk: Purchasing delays
It typically takes six to eight weeks to close on a home. If it’s in foreclosure, that number jumps up to six months to a year. Make sure to consider how long you want to wait before buying.
If you are considering buying a home that is in foreclosure, don’t expose yourself to any unnecessary risks. Talk to us at AM Law to see what we can do. Contact us today.