So How Do You Really Feel About Foreclosures?

One of the hot topics regarding real estate is foreclosures. Are there really a lot of them and are they a good deal. In a recent online survey by Harris Interactive on behalf of Trulia.com, there are some interesting observations regarding whether you, the buyer, would consider purchasing a foreclosure and of those surveyed whether or not they thought there was any negative aspects involved in purchasing one. Here are the facts.

Interest in foreclosures is on the rise. The amount of searches conducted for foreclosures have more than tripled in the first quarter of 2008, rising by 214%. The survey was conducted in late April of 2008 and shows that over half would consider purchasing a foreclosed home.

Do buyers feel there are negative aspects in purchasing a foreclosed home? Yes, 69% of those surveyed said they believed there were with the negative aspects believed to be 69% cited hidden costs, 35% considered the prospect as risky and 33% mentioed the possibility of the home losing it’s value. These are all valid concerns and should be addressed. The following list of guidelines should help.

Prioritize your needs Make a list of what you consider to be the things your new home must have. Just because you got a great deal on the home, if it’s not what you really want, it’s really not such a great deal. Over a period of time, it is much easier to pay for something you like than something you just settled for.

Talk to experts Consult an agent who is well versed on all aspects of the process to help eliminate those hidden costs and risks involved.

Be current Look at the neighborhood data comparing current data to last years to see what direction the market is moving. This can help ease the concern of the property losing it’s value. Although no one can predict the future, you can still make an educated decision by using this data.

Aim high By purchasing a deeply discounted home, you may be able to move to a neighborhood that you previously would not have been able to.

Get a home inspection Home inspectors are licensed by the state of Texas and will give you a comprehensive list of what is right and wrong with the home. Your agent should be able to give you names of reliable home inspectors and the price you pay for this inspection could potentially save you thousands in unexpected repairs.

Buy at the right time The best foreclosure deals are often situations where the home has been on the market for longer than 60 days. The banks are not in the real estate business and have no desire to carry these listings on their books any longer than possible. Not only does it affect their financials, it also affects how much money they can loan because they are still carrying a non-profitable loan on the books when it could be replaced with one that is.

Buy at the right price After considering all the aforementioned items and know what the value of homes in the neighborhood is and what your repair costs will be, does it make sense? If after spending additional funds for repairs and cosmetics such as replacing carpet and flooring and painting, did you save money? Your time and stress level are worth something and if you don’t show a significant savings after all is said and done, you didn’t get a good deal.