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Brokers suggest care when buying foreclosures

November 9, 2010 - The bloated inventory of distressed properties on the housing market has encouraged a number of buyers to consider moving into a foreclosed home for their substantial discounts.

However, real estate agents warn that the savings a homebuyer might find when they first purchase a foreclosed property might catch up with them in the long run. That's because distressed properties can sometimes need extra work and aren't in as good condition as newer homes. Since the homes are almost always sold 'as is,' that means buyers will have to foot most of the bill for repairs and inspections, without sellers' help. Short sales are also popular for buyers looking for discounts, but the transactions can take a long time to get to the closing table.

Dan Firks, an agent with RE/MAX of Naperville, Illinois, said "Buyers must decide if they have the patience and flexibility to pursue a short sale and the skills or resources to deal with repairing a foreclosure. If not, look elsewhere."

Families who are interested in moving into distressed properties are encountering an ever-growing supply of foreclosed homes to choose from. According to RealtyTrac, banks repossessed 288,345 homes in this year's third quarter - establishing a new record.
 

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