Are you planning to buy the perfect home for your family and are on a tight budget? You should consider searching for foreclosures in Red Deer. Do you know a lot of foreclosures in Red Deer rarely stay on the market for more than 2 weeks? Let's first understand what a foreclosure is and how it can be a part of your purchase options.
What is a Foreclosure?
Foreclosure is either a house or a property that is going through a legal process where the bank or the lender (also known as bank foreclosure or court ordered sales) attempts to recover the balance of a loan from the borrower.
Reasons for a Foreclosure
There are numerous reasons why some homeowners come to a decision to let go of their property. Some are forced to do a distress sale and there are few who opt to foreclosure voluntarily. Here are the main reasons:
Divorce or a dispute with a co-owner
Relocation-moving to another province or country
Can no longer afford the maintenance
Fired or laid-off in job
Medical crisis- can no longer pay mortgage
Why choose a Foreclosure?
A lot of people think that foreclosed houses are not the best option. Some think that foreclosures are typically older homes in rough condition and with lower market value. It's also assumed that a foreclosure is less expensive than a newer home. In general, there are lots of advantages and disadvantages to taking the plunge with a foreclosure. At the end of the day, you have to choose the best option for you and your family that will meet all your needs. How can you determine which way to go? What aspects should you look for? Are you making the right decision? Let’s start with how to find a foreclosed property near you.
How to find a Foreclosure property near you.
We highly recommend to reach out to a Real Estate Agent that is familiar with the foreclosure process. Like us, they have the most knowledge, experience and resources. The foreclosure process is very different than a regular property sale. Most of the time you are dealing with an agency that is working for the lender. Remember that an Agent will also be a big convenience for you as you do not need to spend time home searching as you only need to show up for the house viewing.
The Foreclosure Process
Do some research first. Knowing even just a little about foreclosure properties can be a big help to determine what you really need and ensure you are asking the right questions. Usually a realtor or broker is more than willing to explain things to you, however, it is much better to know things beforehand so you know if the broker or realtor is providing you the right information.
Foreclosure Evaluations Now that you have enough information and have a realtor or broker to help you, now comes time for the home evaluation. A careful inspection of your Red Deer Foreclosure property is a must. You may not know that a simple fixer upper home can be a major renovation. See the house yourself; never buy something sight unseen. Ask for permission to have an expert to inspect the home. Or if the house already been inspected, ask for the inspection report. Review it and ask for someone who can explain the things you do not understand.
Keep in mind that the bank will not give you discount or lower the price if you found the house with lots of things to fix. Foreclosure house prices are “as is”. This means it is not negotiable. Is the price too much if you add the cost for upgrades? Is this within your budget? Will this take too much effort to make it your new home?
You also have to consider the surrounding neighbourhood and if also affects the market value of your property. Is it safe there? Are the neighbours too close or too far? Is the community friendly? What are the comparable homes selling for? Do not just focus on the house itself; the outside is important as much as the inside.
Financing a Foreclosure
Set a budget. You should find a home that is within your budget. Don’t waste time looking for houses that you know is way more you can pay for. This will only make you think you should spend more and not considering if you can afford to pay the mortgage in the future. You may find a foreclosure home that has all your wants and needs but more than you want to spend. It may seem you can afford it now but how about in the future? What if intereste rates go up? Thinking in advance is not bad idea but you also have to think for the worst case scenario. You might end up like the previous owner of those foreclosure houses, forced to sell the property because you can no longer afford it. We recommend to all our clients live within your means, your well being, family and future deserve it.
Set your maximum price. Calculate it by adding the asking price plus the cost you will be spending for repairs or upgrades if there is any. Never ever go way over your budget. There is some foreclosure house that allows buyers to bid and we all know that sometimes we can get carried on with the hype and the desire of winning. But bear in mind that this is not just about winning but getting what you need that you can afford.
There are lots of factors you need to consider before buying a foreclosure in Red Deer. All you need to do is narrow down your list depending on your needs and wants. Don’t rush yourself to make a decision immediately. Think things thoroughly and study your options. We are here to help you and educate you on the foreclosure process. Contact us today at 403-505-0039 Lean on our experience to get the deal done smoothly.