1. Cost of repair may get you.
Rarely will you find a foreclosed property that is up to your exact specifications. Because these properties are pre-owned, they most probably have gone through some degrees of wear. Some may be in less than favorable shape and the money you stand to save on the purchase might probably go into repairs and improvements. Ask your agent about the condition of the property and do thorough inspections of the home before taking the plunge.
2. There are three kinds of foreclosed properties:
- Pre-foreclosures – Pre-foreclosures are properties at the stage wherein the owner is anticipating default on payments. owners of pre-foreclosures are typically looking to get out of their mortgage contract through buyers at an agreed price.
- Foreclosure Auctions – Properties that are up for foreclosure auctions have already gone through foreclosure proceedings. They are for sale and can be bought on cash basis only.
- Post-foreclosures – Post-foreclosures are properties that are past their redemption period (the period that are allowed for owners to redeem the property by paying their dues). These properties are under the full control of the bank/lender or the investor who bought the property from the auction/through a pre-foreclosure agreement.