Build Idaho | 2020 BOISE IDAHO REAL ESTATE BLOG
Should I Buy a Home in Foreclosure? Main Treasure Valley Life

On the surface, buying a home in foreclosure seems like an easy way to get a house for cheap; which makes for a profitable flip or a cheap place to live. But is it actually a good idea?

First: What is foreclosure?

Foreclosure is the legal process where a lender attempts to recover the outstanding balance on a borrower’s loan who has stopped making payments. The lender then sells the home at an auction, the proceeds from which will pay the bank back for the amount of the outstanding loan in addition to legal fees.

Is buying a home in foreclosure a good idea?

It depends.

The main problem with foreclosed homes is that the bank is selling the home and property “as is”. This means trash, vehicles, belongings, and occupants are still potentially on the property when it is sold at auction. Paying for removal and restoration, and potential legal action could quickly land the buyer at a financial loss, especially if the auction price was for more than the property is worth.

Before buying a foreclosed property, it is prudent to check out the home’s title for any liens or issues (such as unpaid property taxes, bills, or anything else the previous owner neglected), in addition to driving by the property to inspect the home/property with your own eyes. This—in addition to public records research—will help you determine the home’s value to make sure you are not overpaying. In summary, do your due diligence to get as much information as possible before buying; just like buying homes for sale on the MLS.

Interested in buying a foreclosed home in Idaho? Here is a list of foreclosed homes for sale.

Related: Yes, we are in a recession. No there won't be a housing crash.

 
Posted by AndrewS at 6/25/2020 12:05:00 AM
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Michelle Penick, Boise Idaho Real Estate Agent

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Michelle Penick

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