If you wish to purchase a home but are tight on money, you might want to get the best deal possible. One option is to look for a house sold by a bank. Generally, these are homes a bank has foreclosed on.
While foreclosed houses can go for less money, it is important to be aware of drawbacks as well as potential benefits before buying a foreclosed property.
Positives of a purchase
With a bank-owned home, you should have a better chance of getting a residence with no existing occupants and a clear title. The bank probably has also inspected the house after evicting the previous owner.
Additionally, the residence may be in a neighborhood with homes that usually go for high prices. The foreclosed home could allow you to live in a community that would otherwise be too expensive for you.
Drawbacks of a purchase
Not all foreclosed homes are in good condition. The house may have remained unoccupied for a long time and has incurred wear, damage, mold, and even pests. Also, if the bank sells the home “as-is,” you cannot count on the bank to repair any defects you find in the house.
Without having the home inspected first, you could end up with a property with many costly problems. Additionally, bank-owned homes can still have liens attached which you could become responsible for paying.
The pitfalls of a foreclosed home are real. Nonetheless, they are not universal to all bank-owned properties. In addition, it may be possible to deal with certain problems you find with the home so you can benefit from a lower-cost purchase.