Top 4 Most Costly Aspects of Buying a Foreclosure

Photo by realtor.com

With home prices still high, many of you may have considered buying a foreclosure. Foreclosure purchases are up more than 150%! While you may be able to get a deal, you may also be stuck with a very expensive project. Thanks to this recent realtor.com article we can share the 4 most costly dangers to buying a foreclosure.

1. All-Cash Purchase. Some foreclosures will not allow for a typical mortgage and may require an all-cash purchase. 10% cash down is usually required for the purchase. You will generally have 30 days to repay the rest. And beware of bidding wars – you don’t want to pay more than your budget allows!

2. Lengthy Eviction Process. Many foreclosures come with baggage and upset previous owners, meaning they may not be ready to move out or vacate the premises. You may have to endure a lengthy eviction process. Know your state’s foreclosure laws and have a good, local closing attorney to help with it all.

3. Home Repairs could be Pricey. Chances are if the previous homeowner could not afford to pay their monthly mortgage, then they also could not pay for repairs needed. In addition, many foreclosed homes sit for months without electricity, which can lead to other costly issues. If possible, get a home inspection before purchasing. This will allow you to assess if you’re willing to take on the risks and repair costs.

4. Mold. Because the home has been unoccupied, mold may exist on the walls, in the ductwork or anywhere in the home. Since foreclosures are usually purchase “as is,” it would be a good idea to walk through the property before purchasing and swipe across some surfaces with a white glove or towel to see if you see any residue. While this may not tell you exactly if there is mold, it can give you an idea.