Are Bank owned properties bargains

Foreclosures can offer some home buyers big bargains. Foreclosures are selling lower than a short sale and even lower than a typical sale but as a buyer, you should be careful not to be guided by price alone.

Distressed properties can have great appeal since they are selling at discounted prices. Also low interest rates make foreclosures affordable to many buyers who might otherwise not be able to buy a property. When you are buying a distressed property, as a buyer you also need to be discerning because not every distressed property is a bargain.

As a buyer here are some things that need to be taken in consideration when purchasing a foreclosure:

1. Claims on the property. How many lenders have claims against the property? Are there any other liens or claims on the property? A through search by a title company or an attorney needs to be performed before closing.

2. Financing. How do you, the buyer plan to finance the purchase of the property? If you are financing the property, prepare in advance so you can act quickly when you find a foreclosure that you like. A foreclosure often receives multiple bids so you have to have your financing ready when you will compete against other buyers.

3. Condition of the property. As a buyer, you need to carefully weigh the condition of the property. Some foreclosures require costly and even extensive work so you might find yourself getting in over your head. As a buyer make sure you have a thorough home and termite inspection done on the property prior to closing.

4. Potential delays. If the property is already occupied (tenants) make sure you find out when the lease is ending and what the terms are. If the tenants are not willing to move out after the lease expires, an eviction process may be needed and that would be a costly delay to you as a buyer.

Contact Towns Realty