” Could be peaches, could be lunch meat”
Choosing to purchase a foreclosure is like playing Russian Roulette. You never know what you are going to get. So, are foreclosures really worth it?
You find a foreclosure that just came on the market. It has a great price, the pictures don’t look horrible and you go look at the home. It just looks like it needs a good cleaning and maybe some paint. You decide to bid on the house and the bid gets accepted. Time for the home inspection. The home inspector finds that the entire kitchen’s subfloor needs to be replaced. The water dispenser hose on the refrigerator had popped off and leaked all over the floor. 85% of the wood on the exterior of the home has been repaired with “Bondo” and then painted over. The foundation is cracking in several places. The list goes on and on and the next thing you know, the repairs come out to well over $15,000. Basically the money that you are saving by purchasing the home you have to put right back into the house. The banks state that they are not responsible for ANY repairs. You don’t have the money to repair the property yourself. Your mortgage company requires the repairs be done prior to closing.
What are your options now? You have to cut your losses and back out of the contract. Just be hopeful that the bank will let you get your earnest money back. If not, do you have anymore money to put down again for yet another home. What about another home inspection? Are you going to try for another foreclosure?
Chances are you are not.
Foreclosures can be a hassle unless you really know what you are doing. They can cost lots of money and precious time that you cannot get back. Don’t buy into the saying that foreclosures are always better.
If you are lucky enough to buy one that needs minimal repairs and has instant equity, thank your lucky stars. Most homes that are foreclosures are ones where the owners fell on hardships and could not make the payments. This usually also means that they could not do the repairs to the home as well.
Just the thoughts of someone who has seen the can opened…sometimes its peaches but watch out for the lunch meat.