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Huntsville Home Buyers Rethink Buying Foreclosures

By: Huntsville Real Estate Expert Mike Manosky On January 6, 2009

Huntsville Home Buyers Rethink Buying Foreclosures

Most Huntsville home buyers consider buying a foreclosed property to be a good deal. But buying a foreclosure is not for the faint of heart. The dream of homeownership can often become a nightmare and more and more Huntsville home buyers are becoming leary of foreclosed properties.

Prices on foreclosed homes can be as low as 25% below market value and who doesn’t want to save that kind of money? However, be sure to look carefully at the condition of the property and calculate the cost of repairs into your budget.

Foreclosure homes are sold “as is” which means that the 25 percent you just saved on the purchase price can easily be eaten up by unforeseen expenses such as repairs not immediately apparent in an exterior inspection. Often when you buy a home in foreclosure, you may not be able to look inside let alone have an inspector detect structural problems that you’ll need to fix before moving in. 

Something else to think about — people who lost their home in foreclosure very likely couldn’t afford to maintain their property. 

So be prepared to pay for any problems such as electrical or plumbing repairs, leaky roofs, or even vandalism by angry homeowners who break things or punch holes in walls and doors, an unacceptable but not that uncommon way that some homeowners deal with the angst of losing their home to foreclosure. 

Last spring, 54% of Dallas home buyers said they would consider buying a foreclosed property, according to a study conducted by Trulia.com and RealtyTrac. In the fall, this number dropped to 47% with 80 percent of those surveyed citing hidden repair costs, a tricky buying process, and the possibility that the neighborhood will lose more value and drag the property down with it.

To compensate for these risks, 75 percent say they expect at least a 25 percent discount and 30 percent say they would only buy if there is a 50 percent discount compared with a comparable home that isn’t in foreclosure.

Other findings:

* 56 percent of single/never married adults were at least somewhat likely to consider purchasing a foreclosed home, down from 60 percent in April.
* 43 percent of married adults were at least somewhat likely to consider purchasing a foreclosed home, down from 50 percent in April.
* 42 percent of divorced/separated/widowed adults were at least some

Thinking about buying a foreclosed property? Visit MoveToHuntsville.com for more info. Or give me a call a call, I am glad to help you through the process.

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