Wondering what the difference is between buying a foreclosure vs. a regular home sale? There are a number of possible issues associated with foreclosures that you won't find with regular sales.
If you are looking for a home at a discount price, you may be wondering what the difference is between buying a foreclosure vs. a regular home sale. There are a number of possible issues associated with buying a foreclosure that you will not have to contend with if you buy a home via a regular sale.
Buying foreclosed homes takes a bit of patience, because the process is not as straightforward and predictable as a regular sale. You may buy a foreclosed home at an auction, directly from a lender, from a government entity like the U. S. Department of Housing and Urban Development (HUD) or from a real estate broker.
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When it comes to buying a foreclosure vs. a regular sale, it is important to note that while the lender is motivated to sell the home, it will have a minimum bid price at auction and a minimum amount it needs in an offer. The biggest difference between buying a foreclosure vs. a regular home sale is that foreclosed homes are sold as-is. There is no express or implied warranty on a foreclosed home. What you see, or don't see, is what you get, literally. Any hidden issues are not the lender's problem once you buy the home. If there's mold in the basement or the roof leaks, the expense to fix it is yours.
Likewise, when considering buying a foreclosure vs. a regular sale, the former does not necessarily come with disclosures or the opportunity to order a home inspection. This is especially true of the home is sold at auction. However, if you buy a foreclosed home from HUD or a lender, you are encouraged to get a home inspection first. This doesn't mean these owners will fix problems, yet they may negotiate on price.
Although there are downsides to buying a foreclosure vs. a regular home sale, you can get a great deal on a new home or investment property if you have the property inspected before you buy. If you want to bid on a HUD home, you must work with a HUD-approved real estate agent. Although it isn't required that you work with a real estate agent to buy other foreclosed homes, it is a good idea. Reply! is a great resource for finding real estate agents in your area who specialize in foreclosed properties. An agent can help you sort the good real estate deals from potential money pits.