When a property is foreclosed Aliso Viejo Real Estate, the mortgage lender sells the property to pay off the defaulted mortgage loan of the borrower. Every foreclosed property ends up in a public auction where anybody can purchase the property at the amount posted by the lender. Buyers can also buy the foreclosed property from a bank after the bank purchased the property at the auction.
Buyers find it too risky to purchase a foreclosed property. Aside from the house no longer brand new, the owners can purchase it back after they paid off their defaulted loan. This is why, a lot of buyers frown at the thought of purchasing an auctioned property. The following are some of the reasons.
A foreclosed property has widened the gap between sellers and buyers especially when it comes to price. Sellers think that the foreclosed property costs higher on the market. Buyers think the prices are way too high. What makes it costly is that the property appreciates its value year after year and the lender or seller thinks that way. Meanwhile, buyers disagree on this thought because they think that the house depreciates its value because of all the deferred maintenance.
This is one of the things why buyers wouldn’t buy a foreclosed property. Foreclosed properties usually require an all cash purchase. Buyers can’t take advantage of the low interest rate in the market place right now, which has been one of the main reasons why we have seen such a surge in home prices.
Condition of the House
Foreclosure and short sale properties are often, not always, in bad shape as compared to other house for sale on the market. It would be a huge problem to the buyers especially if the house has been vacated for a long time. It will require a lot of repairs such as plumbing, cooling, heating, electrical and wiring systems. It becomes a burden on the part of the buyer and they need to shell out money on the improvements before they could move in.
Location of the Property
When buying a foreclosed home, you have little to no chance of finding a perfect location for your dream home. Since the properties are pre-owned and not all locations interest you, you will end up settling in a home you are least interested in. Another thing to consider about the location is that buyers like you are don’t want to buy a property in a place plagued by foreclosures and short sale homes. But investors think differently. They find it as a fat investment and direct a huge turnaround on the market of the foreclosed homes. You should consult us about this.
The Owner’s “Right to Redeem”
This is probably the biggest reason why buyers wouldn’t buy a foreclosure. Buying a foreclosure property offers risks on the part of the buyers as the owners have the right to redeem the property up to one year after the foreclosure auction. When the owner of the house has paid off the full mortgage balance and the costs incurred during the foreclosure, the owner has the right to take the house back even if you’ve purchased it already.
In California, like Aliso Viejo, Laguna Hills and Laguna Beach, every foreclosed property comes with a risk and that is the property could be taken away by the original owner if he has already paid off his debts. That is why, it is important to consult with realty professional like the Integrated Realty Group’s team in Orange County.