When making a purchase as big as a house, the deal that you can get on it can have an impact for years. For many, purchasing a foreclosed home is a great way to get much more home for a much lower price. However, it is important to be wise when going about this purchase. While many who purchase a foreclosed home end up getting a great deal, some end up getting in way over their heads. If you are considering looking into the foreclosure market to find your next home, it is essential that you avoid these five critical mistakes that many in the market tend to make.
1. Skipping Pre-Approval
Any time you are looking to purchase a home under a loan, it is essential to start the process by getting a pre-approval. Looking for a foreclosed home is no exception. In most cases, the financing process won’t look much different with a foreclosed home than it would with any other property type. Therefore, if you want to avoid bumps in the road and increase your chances of getting the home you want, it is important that you get all of the finances in line before you begin the process as a whole.
2. Buying in an Unfamiliar Area
When you begin the house search, you may end up extending your search outside of your original plan, welcoming new home styles and potential neighborhoods. While it is good to keep an open mind when house searching, it is also important to know the area that you will end up moving to. If you are looking outside of your original perimeter of homes, be sure to spend time getting to know the neighborhood to ensure that you do not end up somewhere that is not a good fit for you and your family.
3. Skipping the Research Process
Research is an essential part of any home searching process, whether you are looking for a traditional purchase or a foreclosed home. There are a variety of aspects of a home to consider when making a purchase to ensure that you do not get in over your head in necessary renovations. In most cases of a foreclosure purchase, the seller will not be willing to make changes based on inspection. Instead, most of these transactions go through “as-is,” With this in mind, any necessary renovations that the home needs will be your responsibility. Therefore, it is essential to do the research to know how much work and money the home will require so that you do not end up putting more into the home than it is worth.
4. Looking at the Surface Level
Many end up buying a home because of all of the bells and whistles. The flip side is, many also end up passing on a home because of a lack of bells and whistles. When looking at foreclosed homes, it is important to look beyond the surface, and instead look at the bones of a home. Keep this in mind during the research process mentioned above. You can always paint the walls or change the flooring. Serious plumbing, foundation, or electrical complications, on the other hand, can tank your investment if you’re not careful.
5. Buying From Pictures
It is not uncommon for people looking for investment properties to purchase a foreclosed home after only seeing the pictures. This is not recommended. While pictures can show a significant portion of the home, they can often hide some vital blemishes and projects that will require a significant amount of work and money. While visiting a home may slow down the process at times, and while you may lose the sale as a whole, it is always better to be cautious than to rush into a purchase that you cannot see the full extent of.
If you are looking to purchase a foreclosed home, and you want to ensure that the sale runs as smoothly and fairly as possible, it is essential to have an experienced Chicago real estate attorney on your side. Gurney Law Group is happy to help guide you through the process. Contact us today to get started working with a real estate attorney in Chicago.