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Hidden Cost of Buying a Foreclosure House
Wednesday, June 4, 2008
Most real estate investors clap their hands with delight when they see a foreclosure
home that is ready to move in. After all, a well-kept foreclosure home can be the deal of the lifetime.
Right now, there are a great deal of distressed homes on the market. Foreclosures can be a great deal for homeowners how are looking to buy a house. With the rise of foreclosures on the market, more and more foreclosure opportunities are available for real estate investors and home buyers. With this increase, there are more and more properties that are catching the eyes of investors and property buyers.
However, a startling new trend is starting in the world of real estate investing. Although many consumers and potential homebuyers are interested in seeing a foreclosure, the actual sales on these foreclosures can stall. Foreclosures
make consumers nervous and jittery. Although people are willing to look at the foreclosed home, they are less likely to buy it with the inability to negotiate changes or upgrades with the property.
If you are considering purchasing a foreclosure, you need to know the hidden tricks to buying the property. A foreclosed property does not allow a home inspection or negotiations. If you have a wall in the kitchen painted in bright pink, you’re stuck with it. The bank wants to get rid of the foreclosure property and if you want to negotiate, they will just go with the next consumer who is interested in the property and not negotiating.
In addition, studies have shown that nearly 70 percent of future homebuyers know there are hidden risks and costs associated with a foreclosure. Some of these negative risks include the horror of the unknown costs, having the foreclosed home lose value or losing the purchase price entirely.
When should you consider buying a foreclosed home? If you are a real estate expert with substantial construction knowledge, you can feel assured that no matter what might come your way, you can handle it on your own. When you start requesting that professionals come to your home, the cost of labor will add up, making the savings that you earned in the purchase price disappear overnight.
If you have expert assistance
in the real estate market, foreclosure homes can be a great choice. With the expert advice, you are less likely to lose your investment. Also, use this real estate knowledge to your advantage when you analyze the market and neighborhood that your foreclosed property is located within. If you can analyze current and last years home values, you can determine what you can hope to earn from your investment.
Getting a home inspection on your foreclosed home is imperative. You can find and reduce a number of the hidden costs up front when you have an inspector highlight the big problems immediately. Also, if there are any unique architectural upgrades, be sure to look at those thoroughly because these structural changes can be your biggest risk in the future.