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Foreclosures

Advantages and Disadvantages of Buying a Foreclosure

Buying a foreclosed house can mean you get a great deal, but there are some things to watch out for, too.

Many buyers associate buying a foreclosure with getting a steal of a deal. This can be true, but there are also potential pitfalls. The pros and cons of buying a home involved in foreclosure vary with the phase of foreclosure the property is in when purchased. Use this handy guide to figure out what sort of property is best for you! 

Missed Payments/Motivated Seller

Advantages:

  • Seller will be motivated to achieve a fast sale, may create opportunity for below market purchase price.
  • Seller may be more likely to do repairs.
  • Seller might be amenable to providing major closing cost credits and other concessions.
  • Buyer can use regular mortgage financing.
  • Buyer can obtain desired inspections within standard due diligence/contingency period.
  • Seller must legally provide complete history of property’s condition, problems, repairs, etc.

Disadvantages:

  • Seller may not be able to negotiate price below outstanding balance of seller’s mortgage(s).
  • Sellers still have to move out.


Pre-Foreclosure/Notice of Default (NOD) or Lis Pendens Filed by Lender/Short Sale

Advantages:

  • Seller will be motivated for fast sale, increasing buyer’s bargaining power.
  • Buyer can do all standard inspections, including researching title during due diligence/contingency period.

Disadvantages:

  • Unless purchase price will pay mortgage(s) and closing costs in full, lender’s approval of price and terms of sale will be required (i.e. short sale).
  • Lender may not approve price, seller concessions or closing cost credits.
  • Short sale may take 45-90 days to close.
  • Sellers still have to move out.
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Properties in Twin Cities matching Price Max: 700,000, Counties: Wright, Isanti, Sherburne, Anoka, Ramsey, Hennepin, Listing Types: foreclosure

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Please Note: All information provided is deemed reliable but is not guaranteed and should be independently verified. The property information provided on Minnesota Home Venture, Inc.'s websites is for personal, non-commercial use only and may not be used for any purpose other than to identify prospective properties consumers may be interested in purchasing. Property information is gathered from third-party resources including the seller and public records. Minnesota Home Venture, Inc., Onjax, LLC, its affiliates, owners, subsidiaries and subscribers disclaim any and all representations or warranties as to the accuracy or reliability of the information provided. You should verify all claims through personal inspection and/or contact with the appropriate real estate professionals.
Copyright 2017 Regional Multiple Listing Service of Minnesota, Inc. All rights reserved. The data relating to real estate for sale on this web site comes in part from the Broker Reciprocity SM Program of the Regional Multiple Listing Service of Minnesota, Inc. Real estate listings held by brokerage firms other than Minnesota Home Venture, Inc. are marked with the Broker Reciprocity SM logo or the Broker Reciprocity SM thumbnail logo (a little black house) and detailed information about them includes the name of the listing brokers.

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Last Updated 11/23/2017 at 10:11am - Some properties which appear for sale on this web site may subsequently have sold or may no longer be available.
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