Four Disadvantages to Buying a Foreclosed Property

Four Disadvantages to Buying a Foreclosed Property

Buying a foreclosed property is one way to get a great deal. Just be sure you know about the drawbacks and problems that could happen so you can be prepared.

A few weeks ago, we told you about some advantages to buying a foreclosed property. While there are many advantages to it, buying a foreclosure is not always the best way to own a home. Buying a foreclosure has many disadvantages that you may not have considered. If you want to take advantage of today's mortgage rates by buying a foreclosed home, consider these disadvantages before making your final decision.

The Procedure
When you are buying a foreclosed property, it is not like making a traditional home purchase. In fact, there are several hoops you have to jump through in order to get a foreclosed home. Most foreclosed homes are sold to home buyers "as is." This means that you buy the home and if something is wrong with it, it is your responsibility. There is no warranty to cover it. If you are not careful, this could end up costing your tens of thousands of dollars to bring the house up to code or even livable conditions.

Liens and Liabilities
Purchasing a foreclosed property often means that you will need to pay any liens or back taxes on the home before you can take ownership. If you are getting the home for a reduced price, paying these fees may still make the home a great deal. However, be aware of these hidden charges before getting too excited about a foreclosed home's price. There could be a chance that you would have to pay more than just the price of the home.

Purchasing a Foreclosed Home at an Auction
There are many auctions that sell foreclosed properties to the highest bidder. You can participate in these auctions and get great deals on foreclosed homes. However, you must be able to have 10 percent for a down payment when you bid on the home and you must also be prepared to show your proof of financing before you will be allowed to sign the dotted line. If you are not prepared for these stipulations, you could bid on the home of your dreams and then have to say goodbye to it.

Returning Owners
It does not happen very often, but there are times when a previous owner may return to the foreclosed home after you have moved in and try to claim their right to the property. In some cases, you may even have a hard time getting them to move out when you purchase the home. There are remedies for these situations, but it can be frustrating and nerve-wracking.

Foreclosed homes are a good way to get a quality home at a bargain price. However, you must know what you are getting into when you purchase a foreclosed home. Consider these four disadvantages and buying a foreclosed home may work out perfectly for you.

Four Advantages to Hiring a New Real Estate Agent

Four Advantages to Hiring a New Real Estate Agent

Finding the real estate agent is the best way to get a deal on a new house. But what type of agent is better - one who is just starting out or one who has been in the business for several years. While both types of agents have their advantages, here are some advantages that a new real estate agent has over the older ones.

With mortgage rates at historic lows and the homebuyer's tax credit about to expire, it's time to jump into the housing market if you have been considering that new home. But what do you do about finding a real estate agent? Do you want to find one who has several years of experience or do you want to find one who is new so you can save money? There are several advantages for both, but here are four advantages of hiring a new real estate agent for your home buying needs.

New Agents are Usually Less Busy
In most circumstances, a new real estate agent has not built up a clientele. It can take years for that to happen so they are willing to take new clients all the time. In some cases, you may even be the realtor's only client depending on how long they have been in the business. As a result, you can expect personalized attention because they are eager to keep you as a client and they do not have to split their time up as much among different clients.

Newer Agents May be Less Expensive
In order to create a client base, a new real estate agent may charge a lower commission just to attract more business from potential home buyers. There are two ways to look at this, however. One way is to look at it as though you are getting a "good deal" by hiring a real estate agent that will work for cheap. The other way to look at it is that you are "getting what you pay for," but it will be up to you to make that decision.

New Agents Tend to Be More Competitive
Real estate agents who are new to the business will tend to be more competitive because they have more energy and a willingness to please their customers. This is true in many businesses, but real estate agents are a different kind of breed. What this means for you is that you will probably save money on the purchase of the home.

New Agents are More Open
If you have dealt with real estate agents in the past who have been doing this for many years, you may notice they are more "salesy" than they are customer oriented. New agents, however, are usually committed to dealing with clients in a personal way. For home buyers, this can be very refreshing because it makes them feel more like a person rather than a customer.

If you are trying to make the decision between a new real estate agent and a seasoned one, consider these four advantages. When in doubt, you will just have to follow your gut feeling and choose the one that you think is right for you.

Five Ways to Boost the Value of Your Home

Five Ways to Boost the Value of Your Home

With the number of potential home buyers looking for new homes these days, it could be the perfect time to sell. Here are some things you can do to improve your home and increase its selling value.

With mortgage rates at a steal these days, there are many people in the market to buy a new home. Whether it is their first home or their tenth home, they are going to be looking for something that catches their eye and looks like it has been cared for and maintained over the years. As such, here are some things you can do to your home if you want to get it ready to put on the market.

Replace the Front Door
One of the first things a potential buyer is going to see is your front door. If it is wooden or simply weathered and worn, it will not make a good first impression. Replace your entry door with a new steel door to give the sense of newness and security to your home. You can get midrange steel doors for about $1200 but you will recoup about 130% of that cost with that simple improvement.

Renovate the Attic
By making the attic into another room, you automatically add a significant amount to your home’s value. It may take about $49,000 to convert the attic into a bedroom or some other type of room, but you will recoup most of that cost by adding that value to your home.

Add a Deck
A wooden deck is a great place to enjoy the spring and autumn breeze or just cool off in the summer months. It can also add about $10,000 to the value of your home. You will probably spend about that much building the deck, depending on its size and quality, but it will help your home sell faster and give it more appeal to potential buyers.

Finish the Basement
It’s hard to sell a home these days with an unfinished basement. Depending on the size of your home and the type of work your basement needs, you could spend about $62,000 finishing your basement and making it into another living area. You may not recoup that much when you sell the home, but making it more appealing and helping it sell faster will save you money in the long run.

Replace the Roof
If you have had your home for many years and you have never replaced the roof, it might be a good time to do it before placing it on the market. Replacing your roof will not only make your home more appealing to buyers, but it will also help ensure that your home is up to code and there are no major leaks in the roof that will cause the home to fail inspection. It’s better to have it fixed before buyers look at it instead of waiting until it fails inspection because then you will be trying to fix it in a hurry and making bad financial decisions along the way.