The market is becoming flooded with foreclosed properties and for the right person with great timing, this can be a benefit that can set you up nicely in the real estate game, for some unlucky soul buying a foreclosed property can hold a lot of pitfalls.
One thing about buying a foreclosed property is you will often need cash to make the purchase, something not everyone? is able to do. Getting a mortgage to purchase a foreclosed property is not always easy so you’ll need to know what you’re getting in to before you leap.
You’ll often also find that many foreclosed properties are not in the best condition and you’ll have to put in significant work and/or money.? Not all foreclosed properties are in need of repair but many are and many are so damaged that they require so much work the home is almost a tear down.
Another thing that isn’t talked about too much is redemption. Some foreclosure sales are subject to redemption by the owner. This means that if the previous owner can pay the new owner back for the property plus some additional fees then the original owner can repurchase the property, meaning the new owner is out the property, future potential income and possibly some money they already invested.
Foreclosures are definitely a great deal, but it’s essential that you know every aspect of the deal before you decide to move ahead.