Should You Buy a Home in Foreclosure? 5 Factors to Consider

No matter where you live, spend some time browsing homes for sale in your area and you’ll likely come across some properties in foreclosure. Foreclosed homes can be a great deal for buyers, since they’re competitively priced to sell. But there are also risks involved. Figuring out whether or not you should buy a home in foreclosure requires some careful research about what you’re getting into and what you might be able to expect out of the process.

In many ways, buying a home in foreclosure is a lot like buying a standard home for sale. You’ll have to go for a showing, make an offer, and go through an inspection—just as you would otherwise. Where things start to get a little murky is in the process itself. Once a home is foreclosed on, it becomes the property of the bank. The bank then is your seller—not the previous homeowner—and that key difference has quite a big impact on how your sale proceeds.

So: should you buy a home in foreclosure? Before you make your decision, read these five factors that you should consider so that you can ensure you make a smart purchase.

You’ll Definitely Need to Go See It In Person

You’re Not Going to Have Recourse for Repair Work

You Will Have Some Things You Can Negotiate Though

You’ll Need to Get Your Financing in Order as Early as Possible

You May Have to Wait a While For Your Closing Date

Want to Buy a Home in Foreclosure? Act Fast

The national foreclosure rate has been falling steadily for the past eight years, and in 2018 it hit a 13 year low. That’s good news for the housing market and general economy, but can mean that if you’re interested in buying a foreclosed home you’re going to have less inventory to look through.

Talk to your realtor about the benefits and drawbacks of buying a home in foreclosure in your desired area, and also to get a full picture of what’s available. As with any market—traditional or otherwise—the less inventory available, the higher the demand. If you find a home in foreclosure you’re really interested in, you’ll need to act right away, before someone else can edge you out for the deal.