5 Common Mistakes Made During the Foreclosure Buying Process

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Foreclosure properties are excellent investment opportunities for homebuyers looking for an excellent deal on their next home. If you are thinking of purchasing a foreclosure, it is important to recognize some inevitable complications in the process rather than the traditional process of buying a home. Continue reading to discover some of the most common mistakes made during the foreclosure buying process.

Failing to check on whether or not the home is winterized

When purchasing a foreclosure, be sure to check to see if the property is winterized. With this, it is important to ensure that the pipes are in good condition for the coldest months of the year. Cracked pipes caused by freezing temperatures can leave your home vulnerable to mold by causing leaks.

Failing to factor repairs into a budget

Before any real estate transaction, it is always a good idea to create a budget. Many people go wrong in this step by failing to factor repair and maintenance costs into their offer on a foreclosure. In this, it is essential to first calculate what you will need to spend to make the home livable. Failing to take this step seriously could lead you toward buying a home that you cannot afford.

Failing to research how long the home has been vacant

Before you submit an offer on a foreclosure, investigate and learn as much as you can about the property. One crucial detail to consider is how long the home has been vacant. The reason for this is because the longer a home has been empty the more repairs you can generally expect. For instance, if a home has been vacant for an extended period, you should not be surprised if there are issues with plumbing (poor drainage and seals) or if you have an insect problem.

Failing to request a private inspection

Did you know that the majority of banks allow for home inspections? In many cases, they even encourage it. A thorough inspection will detect damage and potential issues that would affect the value of the property.

Failing to consider the surrounding neighborhood

It is important to put significant consideration into the neighborhood before you purchase a home. As you research a foreclosure, do your research on the area to see if there are other foreclosures in the area affecting the market.

HUD Foreclosures

HUD foreclosures and VA Foreclosures are some of the best homes to buy when price is part of the equation. As with most Americans, price is always a concern. If not buying the same house for less, why not buy more house for the same dollar invested? When looking for a good deal it is hard to do better than the VA or HUD foreclosures market. The simple truth is that there are just more VA and HUD homes on the market, as they represent such a large number of mortgages that are generated each year. This translates into more foreclosures just by the magnitude of difference between all others comparing to the two largest.

The two largest also being government owned and operated means that they have less time to wait to make money back on the home. The FHA is especially known for selling HUD homes for less than the average sales price in a given area. FHA foreclosures represent a fraction of HUD but they are still a significant number of homes and both should be considered.

VA (Veterans Administration) and HUD (Housing and Urban Development) have different and unique opportunities for the buyer. Both are often forgiven for the local taxes normally associated with the purchase of a home (this is on a county by county basis). Be sure to ask the local title company or escrow company to look into it for you before closing as this is often missed due to their are not used to dealing with the 2 to 3 percent of the market that VA and HUD foreclosures represent.

Free Foreclosure Listings

ForeclosureWatch.com is a website that simplifies the process of finding foreclosures and HUD properties. Everyone thinks they are a real estate web surfing pro until they search for foreclosure homes and stumble upon a numerous sites that want to charge a fee to see their listings. With ForeclosureWatch.com that’s not the case. When searching for HUD properties or a home finding website for foreclosure it is important to know what you are looking for. It is important to use a niche company that specializes in foreclosures like ForeclosureWatch.com. We have put together 2 tools that have made the real estate search process of our website much easier to navigate. The Homesearch online tool is filled with foreclosure lists and free listings of hud homes for sale. Most of our users start with a broad search with the homesearch online tool to see the most HUD properties and foreclosure lists in your area and narrow their search down with the Homefinder online tool. The homefinder online tool is a custom filter system that we breakdown the area based upon filters such as convention and foreclosure listings. This give you the option to filter out conventional listings and focus on just the foreclosures in the market. We thank you for making us Americas top home finding website for foreclosure and Hud properties. Free listings of hud homes for sale are hard to come by but should always be free and that’s the way things are going to stay on our website.

Foreclosure Listings Increasing

As the market settled after the mortgage meltdown foreclosure listings also settled and fewer homes were on the market with a placard reading “Bank Foreclosure” in big red lettering. This was a good thing for the entire real estate market. Having an abundance of foreclosures brings the entire market down and it makes it harder for home owners, who would like to move, to get the appropriate price for their home as a similar home down the same street was sold for substantially less and the appraiser is using the foreclosure as a comparable sale.

This is just one of the problems when there are too many foreclosure listings in any area. Another issue is the television set that sits in everyone’s living room harping about the price of homes based on the number of foreclosures and this constant barrage of negative information makes most people sit on the sidelines waiting for the market to either implode completely or to correct itself. Meanwhile while they wait, others are buying foreclosure listings and making great investments.

Whatever the reason, a market can only handle so many foreclosure listings at any given time. The more foreclosures, the lower the market gets and this is a lesson the banks that were foreclosing and selling off realized too late. The market and their investments would have been better off if there had not been a rush to divest themselves of the toxic assets made more toxic by their own actions.