Experts say more home buyers in today's real estate market are looking to buy a foreclosed home because of the cheaper prices. Some purchase a home to live in while others do so as an investment opportunity. They're not mistaken to think distressed properties can come at a bargain - the National Association of Realtors reports many of them cost an average 20 percent less than regular homes for sale. However, the New York Times notes buying a distressed property is an entirely different experience from buying a regular home, and home buyers need to enter the process armed with the right knowledge and a good real estate agent.
Knowing the risks
While it's true one could strike a satisfying deal on a distressed property, there are plenty of risks to take into consideration. For instance, the properties can sometimes come in poor physical condition, meaning a home buyer might find themselves investing much more money into the renovation and repair of the home than they expected. In fact, the repair costs could add up enough to make the difference in buying a regular home negligible. Of course, if a person is buying the home as an investment opportunity, they might already have cash set aside for repairs, said the New York Times.
Additionally, while some may think buying a distressed property can lead to big investment returns, the New York Times cautions that there's no such thing as a sure thing in real estate. It may take a while for the property to build up value, meaning investors may need to be prepared to settle in for the long haul.
A home buyer's real estate agent can help
The right real estate agent can make navigating the murky foreclosure waters - which are wrought with complicated financing methods and issues of property title - all the more easy. There are many real estate agents that have extensive experience coordinating the purchase of a distressed property and seeing it through the transaction phase. A good agent can work with a home buyer through any legal issues, pick out the right type of distressed home in an ideal location, and guide a home buyer away from the wrong type of property.
While there are risks, buying a foreclosed home can end up being a satisfying experience for the home buyer who takes his or her time to learn the ins and outs of the transaction and who is backed up by a knowledgeable real estate agent.
coldwellbanker.com May 25, 2011
