We are all aware that homes can be sold at various points during the foreclosure process. As a realtor, you might step into the process when a property remains unsold after the foreclosure process is concluded. One big difference is that the bank or financial institution selling the home will ultimately pay you the commission.
Your client, however, will likely have many questions about how exactly the foreclosure process develops. As a result, this article reviews some of the biggest misconceptions that clients have about the foreclosure process.
Cash is Not Always Required
A myth persists that foreclosed homes can only be purchased with cash, but during the pre-foreclosure or short sale process, a property purchaser need not pay in cash. Instead, some foreclosed homes can be purchased using a traditional mortgage. In situations in which a property is sold at public auction, however, cash is often required. Even in these cases, though, it might still be possible to take out a line of credit.
Property Purchasers Still Have a Right to Inspection
Even if a home is purchased in foreclosure, a buyer still has the right to have a home inspection performed and to ask for repairs to be performed just like with any other property. Also, just like property transactions, the seller is not required to make these repairs. It is also a good idea to receive an inspection because many homes have electrical, plumbing, and structural defects.
Foreclosure are Not Riskier Than Other Purchases
All real estate purchasers carry a degree of risk, but purchasing a foreclosed property is not any riskier than other types of property acquisitions. The only situation that is much riskier is purchasing a foreclosed property at auction because this means that the buyer is acquiring the property as it is without the ability to have an inspection performed.
Foreclosures do Not Always Require Substantial Work
Not every home that is sold at foreclosure requires substantial work. Instead, some homes that are sold during the foreclosure process are in okay condition and merely end up being foreclosed due to a death, divorce, job loss, or illness. This is why it is critical to perform adequate research on the property’s history before attempting to purchase a foreclosed home.
Foreclosure Homes do Not Always Provide Great Discounts
Some people believe that foreclosed homes always sell for at least half of their original value. In reality, the bank or financial institute that owns the home is still interested in making a profit. While purchasing a foreclosed home might save some money, not every purchase of a foreclosed home results in a windfall for the purchaser. This is why purchasers should add in renovation and repair costs to the price required to purchase the home.
Speak with an Experienced Property Law Attorney
The foreclosure process can result in various complications. If you need the assistance of an attorney to navigate any of these issues, do not hesitate to contact Adam Law Group. During a free case evaluation, we will review your various options to proceed.