New Homes vs Foreclosures
Posted by Elizabeth on January 13, 2010
Purchasing a foreclosed home can save you up to 25% towards the price of a home, but there are several things you must think about before making that decision.
You are purchasing the home as is.
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If you’ve noticed in foreclosed home ads, they usually read:
“This home is being sold as is…., Seller will not pay for inspection…, No repairs will be made…” -
Homes go into foreclosure when an owner is unable to meet the financial obligations of a mortgage. Their inability to pay their mortgage may also mean they weren’t financially able to maintain the property.
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When you’re buying a new home, the builder is responsible for some repairs-often times more than a month after the sale.
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The buyer is 100% liable for all repairs after purchasing a foreclosed home (even cracks in foundation and leaky roofs.)
New homes are made from the latest materials and newest technologies that require little to no maintenance.
The home does Not come with a warranty.
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As mentioned above, you have to arrange your own inspection and the homes come with no warranty. You may end up with substantial maintenance bills and unexpected investments.
New homes are protected by warranties protecting you from unexpected repair bills after your purchase.
Disgruntled Owners
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Often times, these owners are upset that they’ve lost their house, and can leave the home [that you've just purchased] in bad shape.
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Since they aren’t liable for repairs, you’re putting yourself at risk of coming “home” to damages that weren’t there before.
Why repair what someone else has damaged? New homes give you an opportunity to build your dream home.
Eviction Responsibilities
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When purchasing a home, the last thing you want to do is evict the current owner, but if the bank has not begun the formal foreclosure proceedings, it may be your responsibility to evict the owner.
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In most cases, the home needs to be inspected before you can get a mortgage. If you are dealing with a situation where the tenants are still living in the home, an inspection could be near impossible.
New homes are available whenever it is conducive to your moving schedule.
Just because it’s a foreclosure doesn’t mean it’s a good deal.
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Sometimes, mortgages have run so steep that the asking price from the bank is actually more than what the house is worth.
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Do your research and make sure you’re not paying too much for a home.
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If you choose to purchase a home at an auction, you’ll most likely need to pay the down payment or entire balance on the spot with cash or check.
New homes are available for incentive programs, making it more affordable for you to own a new home.
Are the risks really work saving a few bucks in the beginning?
Comments
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I agree when you buy a new home you know exactly what you are getting when you make the purchase. Also, with all the great incentives out there you can sometimes get a better deal buying new.