We go over a few of the ways buying a foreclosed home can be different than a regular transaction. If you are buying a foreclosed home in Albuquerque, New Mexico this is the post to read!
NM Homies Real Estate – Helping you buy and sell in ABQ, New Mexico
There are a few key differences between buying a home in a regular transaction from a person and buying a home from a bank. With a foreclosure transaction, the main differences are with the things that the bank does and doesn’t allow after the offer is accepted and the ball starts rolling. The main things to look out for here are as follows;
👉 The utilities are usually not turned on, making it difficult to inspect.
The bank will usually have the home winterized so this means water and utilities shut off. This is to help prevent leaking pipes, pipe bursts, and other damages that are liable to happen when a house is not being lived in. That leads us to our next point…
👉With no one usually living in the house, it’s not immediately known if the home is habitable.
Almost all homes that have been foreclosed on are not being lived in during the time of sale. This means that for the proposed buyer, there is no way to really know if the home is completely habitable. This calls for not only a deeper inspection but also a little more of a risk when purchasing. Most of the time we don’t even think about the habitability of the home because people are already living there.
👉Not all loans qualify for foreclosure so there will be less competition!
Cash or conventional loans are the most acceptable when it comes to purchasing a foreclosure. FHA and VA loans are often harder to qualify with as there are stricter appraisal standards, standards that foreclosures generally have a hard time meeting.
👉You can get a better deal on a foreclosure since the bank is wanting to usually just break even.
For most people, the biggest benefit of buying a foreclosure and the biggest difference from a regular transaction is the price point. Because of all the other factors above, the price of a foreclosure is often less than a normal house on the market. When buying a home from a bank you are not dealing with someone who is emotionally attached to the house, has any visions for the home, or is needing the money for a future. The bank is mostly concerned with breaking even, meaning you get to get the house at a lower price.