Top 5 Mistakes Buyers Make When Searching for a Home – Part 4

This is the fourth post in a series called Top 5 Mistakes Buyers Make When Searching for a Home. See Buyer Mistake #3 here.

Buyer Home Search Mistake #4: Exclusively Searching Foreclosures Because You Assume They Are The Best Deals

When the market first dropped foreclosures were most often the best deals because home owners selling privately often priced their houses above the market because they hadn’t accepted the drop in values for themselves. The majority of people who need to sell in this market realize they have to price their house right to get potential buyers in the door.

Also thrown into the mix now are short sales. If you have the time and patience, these can be great deals for buyers.

Considerations:

  1. Foreclosures are sold “as is.”
    There are often repairs to be made. When determining whether the price is a “deal” consider how much must be spent in repairs first.
  2. Short Sales are sold “as is” but may have been well maintained until recently.
    Even though they are sold “as is,” you can typically tell whether the home has been well maintained. They are often in better shape than the foreclosures but can be less expensive than private sales.
  3. Private sales can be priced competitively.
    These are homes being sold through traditional channels by owners without third party involvement. Often these are priced at or below market value and the owners are willing to make repairs to ensure the sale. A motivated seller who has equity in the house may sell at a price that competes with the other two options.
    Even if you’re set on purchasing a foreclosure, it doesn’t hurt to keep an eye on potential private sales that may hit your purchasing sweet spot. At the very least, it will help you to foresee what a homes value might be once you fix up that fantastic foreclosure deal!

Up Next – Buyer Home Search Mistake #5: Assuming all sellers are desperate to sell their homes.

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