General Information - Despite Affordability, Foreclosure are Risky Business



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Despite Affordability, Foreclosure Are Risky Business

 

While delinquent homes including foreclosures and short sales offer deep discounts to those looking to purchase Boynton Beach real estate, they don't come without risks. When deciding to purchase an existing home versus a newly constructed property, you should keep these potential risks in mind.

 

While delinquent homes including foreclosures and short sales offer deep discounts to those looking to purchase real estate, they don't come without risks. When deciding to purchase an existing home versus a newly constructed property, you should keep these potential risks in mind.

Many foreclosed homes may come as-is, which could mean they are in very poor condition due to being abandoned while on the market or neglected by homeowners about to be evicted. While you may save on the initial cost of moving in and have a low monthly mortgage payment, foreclosures may require you to spend more on both repairs and maintenance. Since the previous homeowner couldn't keep up with their mortgage payments, they likely didn't make any investments in replacing dated appliances or making any needed improvements.

Buying a foreclosure that is a bank owned property may also take longer when it comes to paperwork and financing. Since builders usually work with a dedicated third-party lender, the process can be quicker and require less time for inspections and research on the home's history.

Homes that are auctioned may offer the greatest discount but also come with greater risks. Properties purchased through the state's foreclosure process typically can't be inspected by potential buyers and are also usually still occupied by the homeowner facing foreclosure.

Legal issues can also easily arise when purchasing a delinquent home, including unexpected costs or fees acquired by the previous homeowner. These could be back taxes or contracting fees that sometimes get transferred to the new owner. If required, the eviction process can also be lengthy, so if you're looking for a quicker and more simple transaction, buying new may be a better option.