At the height of the housing crisis, you might have heard stories about the huge discounts available on foreclosed houses. Foreclosures could be had at less than half the price of other homes. There’s still the general idea that foreclosures are always a bargain, but that's not necessarily so.
Yes, foreclosures frequently sell for less than other homes, but they aren’t like other homes. When people are in financial crisis, unable to make their mortgage payments, chances are that they aren’t keeping up with basic maintenance. Why fix the roof when you’re going to lose the house anyway? Also keep in mind that banks don’t have the same disclosure obligations as traditional homeowners.
Of course, the impact of foreclosures on price varies from market to market. In some regions, the discount for buying a foreclosure is still steep. In others, it has all but disappeared. Instead of assuming you’ll get a better deal on a foreclosed home, make sure you are comparing prices between homes of similar size and similar condition. There are still inspections and an appraisal to take into consideration and negotiating with the bank is not the same as negotiating with a private seller.
Give me a call so I can answer any questions you may have about buying a foreclosure.