Should you Buy a Foreclosure?

Posted by Dan Miller, REALTOR on Tuesday, February 12th, 2013 at 5:09am.

Many Madison area home buyers gravitate toward bank owned properties and short sale listings. In the right situation, an REO or short sale property can offer the prospective buyer an incredible value. We've assisted many clients with their purchase of a foreclosed home or condo, and we've seen our buyers achieve some amazing deals. But there are some caveats related to buying foreclosures in Madison. If you've been thinking of buying a distressed property, here are five things for you to keep in mind.

Before you Buy, Keep these 5 Things in Mind:

  1. Distressed properties represent only one piece of the market, and the supply of foreclosures is decreasing. If you limit your search to REOs and short sales, you're missing out on the possibilities that the other 80% of the market has to offer.
  2. Buying a foreclosure does not necessarily guarantee an incredible value. When you buy a distressed property, you are often up against many other buyers and investors who are drawn to the idea of getting a bargain basement price. The paradox is many foreclosures end up selling for well above the list price, due to an intense amount of interest from multiple competing buyers.
  3. Buying a distressed property can involve delays, uncertainty, and a broken deal. These things come with the territory. You should consider whether or not you are prepared to deal with the ups and downs that can come with buying a property from a large, multi-national bank.
  4. Many other "non-distressed" homes and condos are selling for prices that are well below the market peak from several years ago. These are properties that are move-in ready and in great shape. Combined with today's great interest rates, buying a home in 2013 offers a great value proposition compared to many other years in the recent past.
  5. You need a solid home-buying plan. The Madison market dynamics are different in 2013. Whether your purchase plans involve a foreclosure or not, you and your buyer agent need to put a focused plan in place.

Thinking of buying in 2013? Our Madison-based buyer representatives have the experience and expertise to help you find and close on your 2013 dream home. Contact us for a no-hassle consultation. We're here to help!

This article is published courtesy of:
Dan Miller, REALTOR
Mad City Dream Homes & RE/MAX Preferred
1619 Monroe Street #1, Madison, WI, 53711

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