The Do's And Don'ts of Buying Foreclosed Property | Boynton Beach Real Estate

the do's and don't of buying a foreclosed property

Foreclosed properties can often seem like a tempting option for those looking to invest in real estate in South Florida. Though we’ll likely never see an event as calamitous as the 2008 recession, savvy buyers are always looking for bank-seized properties and fixer-uppers. Foreclosed properties come with their baggage, but offer often substantially lower prices and thus, greater profit potential. However, the risks and challenges associated with foreclosures are something every Boynton Beach home buyer should be keeping in mind. While there’s no perfect formula for a standard real estate transaction, there are certainly plenty of do’s and don’ts that home buyers and Realtors should be aware of.

Do: Work with a Real Estate Agent Experienced in Foreclosed Properties

Buying a foreclosed property can be a rigorous and unique process, so it is important to work with a real estate agent who has experience in this area. Bonus points to any Realtor who served the people in 2008, when the mass of foreclosures completely tilted the market.  

Don't: Skip the Inspection

A foreclosed property doesn’t always equate to a “fixer upper” but even the prettiest Boynton Beach home foreclosure may have hidden risks and potential pitfalls. It may be that the previous owner was financially upside down due to major repairs and unpaid expenses, making the inspection process that much more crucial.

Do: Get Pre-Approved for Financing

This is more general than unique to foreclosures, but it’s an essential component of a smooth home-buying process. A buyer that is organized, prepared, and approved is ready to take on the transaction, whereas those awaiting qualification are still incapable of completing a transaction and should reconsider entering one in the first place.

Don't: Assume the Property is a Good Deal

Back to our point about never skipping the inspection, a lower-than-market price doesn’t always mean it’s a good deal. You may get a home for a third less than the one next door, but if it has major repairs, hazards, or potential renovations that must be made, are you getting a good deal? You may be just buying a home at the same end price as your next-door neighbor, with the added responsibility of facilitating the repairs and renovations.

Do: Consider the Location

Location is the most important three words in Real Estate. Foreclosed properties are no exception, and in some cases may be more of a corroboration of the rule. Unoccupied, decaying homes and numerous foreclosures in a concentrated area may be signs of regional poverty, crime, and financial insolvency. While we suggest deeper research than dismissing a region due to its foreclosure history, it is often a lack of abundance that leads to property crime. Be wary of the area around your home, as you always should during your home-buying process.

Don't: Forget About Additional Costs

Never forget the added costs that come with your foreclosure! These could be anything from repairs, closing costs, taxes, legal fees, and insurance. Be sure to recognize the potential for higher upfront ancillary costs despite the reduced overall price of the home.

Do: Research the Property's History

Like a new date, you’ll want to know a little more about the history behind your quarry before entering a new engagement. Foreclosures are a byproduct of financial insolvency, but as mentioned before, might have a more complex history than a standard home for sale in Boynton Beach.

Don't: Rush the Process

Never rush the process! Patience is a virtue, especially when considering foreclosure. The complicated history may come in the way of “damaged goods” whether that be actions by the previous occupant or general property concerns. Patience is the most important trait a good home buyer can have, especially as it pertains to properties with complicated histories and potential financial pitfalls.

Learn more about the home buying & selling process. Click below for two more helpful blogs from our team.

Boynton Beach Real Estate Market Report (2022) | A Millennial's Guide To Saving For A Home

Post a Comment

New Listing Alerts
Get Pre-Approved
What's My Home Worth?