Every Dearborn MI area home and real estate buyer looking to purchase in today’s real estate market will need to decide if they would consider buying a bank foreclosed home, or a home that is being sold as a short sale. Both of those options can have advantages and disadvantages. For many home buyers, the disadvantages greatly outweigh any advantages and they end up purchasing a home offered as a traditional sale.
In addition, you need to keep in mind that bank owned properties (foreclosed homes) and short sales are not the only good deals out there. In fact, when all is said and done, sometimes the bank owned homes will cost you more than a buying a home that is already in move-in condition.
Bank Owned Homes / REO / Foreclosures / Foreclosed Homes
These are homes that someone purchased, defaulted on the mortgage meaning they didn’t make their payments and now a bank owns the property.
Advantage: Price may be less than other homes in the area
Disadvantages: Might become a “money pit” due to the following…
- No utilities on: Foreclosed homes usually do not have gas, electric, and/or water services on – sometimes this has lead to dangerous mold growth. You may be required to turn the utilities on and put them in your name before you close on a bank owned / foreclosed home.
- Stripped out: You’ll often find that these homes do not have a furnace, central air unit, plumbing, fixtures, ductwork, kitchen cabinets, electric service, toilets, hot water heater, siding, etc. have often been stripped from the house
- Poor condition: Many foreclosures are extremely dirty, have holes in walls / trash strewn about, broken/missing windows and doors
Water damage due to leaks, water left running, sump pumps not operational
- Other damage: Structural issues and/or other damage to property due to neglect and exposure to elements
The old adage of you get what you pay for is most often true with bank owned homes / foreclosures. Those that need a great deal of work Read more…