In the last 10 years, more than 12 million Americans lost their home. In some cases, they were foreclosed on by banks and in other cases, they simply stopped paying their mortgage. Foreclosures are a complicated subject, but if you’re a buyer looking to purchase one of these properties there are certain mistakes that you need to avoid! This blog post will outline 10 common mistakes that buyers make when purchasing foreclosures so you can avoid them yourself!
Mistake #1:Not Asking Enough Questions
One of these common mistakes is not asking enough questions! Whenever you’re looking into buying a foreclosure, make sure you ask as many questions as possible and take some time before deciding anything. Foreclosure properties are usually sold ‘as-is’ which means you’ll have to be the one who fixes things up. This can mean a lot of work!
Mistake #2: Inspecting the Property You’re Buying
Make sure you inspect every single part of a property before committing to buying it. Foreclosures are often in need of major repairs so make sure that if something seems off, you investigate! Some people have even found moldy walls or illegal additions when they’ve inspected their new foreclosed home. And remember – as we mentioned earlier, foreclosures usually come with ‘as-is’ warranties which mean all this work is on your hands and there’s no guarantee that any problems will be fixed by the seller!
Mistake #3: Not Reading the Property Documents
When you’re looking to buy a foreclosure property, make sure that before signing anything, you take your time and read everything! You’ll need to be able to summarize what’s in all of these documents for years down the road. That can be an overwhelming task so make sure not to sign until you’ve done it thoroughly.
Purchasing a foreclosed home can be risky due to the potential lack of warranties and guarantees. It’s important to do your research and ask a lot of questions before committing!
Mistake #4: Not Getting Pre-Approval
If you don’t have any money saved up to help cover the cost of buying a foreclosure, then get pre-approved before asking your agent for one! You’ll need a larger down payment and the house will be in your name – not someone else’s.
Mistake #5: Focusing on Price Alone
Foreclosures can often go below market value because sellers are desperate but remember that these properties usually require more work than other homes so make sure you’re comparing apples to apples when it comes time to buy. And if possible, consider looking at foreclosed houses with friends or family members who may know better what they should look like instead of solely relying on photos online. This way, you know what you’re getting into beforehand.
Mistake #6: Not Getting an Appraisal or Home Inspection
This is a common mistake that buyers make and it’s important to get an appraisal of the property before buying so that there are no surprises down the road! A home inspection will also help determine how much work needs to go into this investment. If nothing else, these things can save you from major headaches as time goes on!
Mistake#7: Thinking You Can Handle Everything Yourself
Another big mistake people often make when considering foreclosed properties is thinking they’ll be able to handle everything themselves. There could always be hidden defects like mold or asbestos which would require professionals who know what they’re doing instead of amateurs. As we mentioned earlier, these properties are often in need of major repairs so it’s important to know what you’re getting into and who will be working on this project before committing!
Mistake# 8: Expecting a Home Inspection or Appraisal Report
Remember that an appraisal is only as good as the inspector doing it. You may want to consider hiring your own home inspection expert if possible – not just relying on someone else’s opinion.
Mistake #9: Not Getting Closing Help
Another mistake that buyers make when purchasing foreclosures is not using an experienced professional for closing help. This may seem like a no-brainer but remember, the seller has to approve this person! You won’t want someone you don’t know handling your most important transaction of all time so make sure that if possible, you find an experienced professional for closing help.
Mistake #10: Not Walking Away
Another common mistake buyers make is not being prepared to walk away if the deal doesn’t feel right. Foreclosure property can be a great investment, but you must be comfortable with what you’re buying! There are plenty of other houses out there and this one may not be worth all your time or money. Spend some time thinking about whether or not this house will work for you before making any decisions on the spot!
“So before buying a foreclosure property, here are some things to consider:
Inspect every single part of the home and ask as many questions as necessary
Don’t sign anything until reading through everything thoroughly – it’s ok to take your time!”…and finally… “If there is something off about any aspect of the house or contract and you’re not 100% comfortable with what you’ve learned beforehand, walk away.”
In conclusion, there are many mistakes people often make when considering a foreclosure property and it’s important to do your research beforehand so that you’re not left feeling regretful in the end. If possible, hire professionals for various aspects of the home buying process like inspections or appraisals before making any decisions – there is no shortage of other houses out there! Happy House Hunting!