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3 Things To Know Before
Signing On A Foreclosed Home

home equity articles and tips

 

Buying a foreclosed home can be one of the best opportunities of your lifetime. It can also be a source of great stress and hardship if the right choice isn't made. Being educated about the process as well as the home you wish to purchase can help you to decidedly avoid many headaches that can accompany foreclosures.


Neighborhood Demographics


There are many things about the foreclosure in question that we must assess. Aside from the home itself, it is also quite important to become knowledgeable of the surrounding neighborhood and neighbors first. This is the only time in life you will be able to pick your neighbors, so it's only wise to take advantage of the opportunity.

If all signs point to a healthy and/or improving community, then your purchase may not be a terrible idea. However, if the neighborhood is in a noted state of decline, and the neighbors and associated properties don't look very well kept, consider looking elsewhere. The negatives of crime, poverty, and social problems will always overrule any positive savings achieved in the home purchase. Leading Edge Real Estate and other similar professionals can assist with expert research and suggestions for neighborhoods with positive reviews.


Weather, Geography, Natural Characteristics


Certainly, everywhere you go there will be matters of geography, weather, and other elements of nature that can prove difficult to deal with. Buying a house at the bottom of a hill in an area where heavy downpours are not too uncommon, or on the coast where frequent storms occur not only increase your insurance but can be tricky to safely deal with. Take a hard look around at the natural features of the home's surroundings and weigh out the pros and cons of any risk factors.


Totality of Repairs


Finally, you need to get a total for all foreseeable repairs and improvements that will come with the purchase of your foreclosure. Rather than a basic mental picture, all items should be recorded and priced. After saying so many times “we can fix that” you may be surprised at the totality of calculations in the end. 

Don't forget too, unforeseen issues are a common, lingering part of foreclosed homes. This is because in most cases of foreclosure, there is little information to be had from past owners or contractors. Things well-known to them may be just waiting to be discovered by you now that the property is yours. Get an educated total now so that later, surprise issues can be more easily managed.

Do as much homework as possible before your purchase. Only then have you truly done all you can in knowing what you are getting into. This very well may be the best purchase you ever make. Researching areas such as the three discussed here will make this possibility much more of a likelihood for you.