4 Risks of Buying a Foreclosure and How to Combat Them

Some key benefits of doing so include: 

• Quicker buying process 
• Higher return on investment 
• Better opportunities for moving into higher priced neighbourhoods
• Lower down payments 

Want to Invest in a Foreclosed Home But Don't Know Where to Start? Our Top Calgary Realtors Can Help! 

Whether you are downsizing or looking for your first home, our top Calgary realtors can provide you with expert advice in any situation. We have access to many foreclosure listings and our real estate agents have many years of experience in the market and can help make your home buying experience as stress-free as possible. 

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FORECLOSED HOMES IN CALGARY 

4 Risks of Buying a Foreclosed Home and How Our Calgary Realtors Can Help You Combat Them

It’s no secret that there are risks involved with buying a foreclosed property, but knowing about these risks will allow you to put plans in place to deal with possible worst-case scenarios so you can make, and not lose, money. 

Here are the four main risks of buying a foreclosed home:

1. The House Might Be in Bad Shape 

Foreclosed homes are sold ‘as is,’ which means that if any repairs are needed, they haven’t been done.  In fact, if homeowners are in such dire financial straits that they can’t pay the mortgage note, they probably aren’t keeping up with maintenance either. 

Some possible issues with buying a foreclosed home that could prove to be big expenses include: 

• Leaking roof or water damage
• Termites or insect infestation 
• Faulty wiring
• Bad plumbing
• Structural issues 
• Mold 

Ask for an Inspection: Apart from any surface level issues, there might be larger things that you will have to deal with. Always ask if you can have a copy of an old inspection, as this will give you insight into the history of the home and how much you should offer for it. 

TOP QUESTIONS TO ASK BEFORE BUYING A FORECLOSED HOME IN CALGARY 
 

2. The House is Vulnerable from Being Vacant 

A foreclosed home has probably been sitting vacant for quite some time. That makes it subject to vandalism, squatters, theft, or even fire/water damage. Just keep in mind that the longer the home you are interested in buying has been sitting vacant, the more likely it will be for damage to have occurred. 

Always Consider the After-Repair Value: If you only consider the price of a home, and not the repairs involved, you could easily lose money on the deal. Investors must always consider the after-repair value of a home, as well as the acquisition cost. 

3. The Buying Process Could Be Difficult 

It may take longer to buy a foreclosed home. Instead of dealing with just a seller and their agent, you are now dealing with a bank. Sometimes, banks can drag the process on longer than a typical closing from a homeowner. 

Why It’s Best to Work with a Calgary Realtor When Buying a Foreclosure

If you are considering investing in a foreclosure, always work with a realtor who specializes in this. They will have the required training and experience to help you avoid possible hitches or delays. 

4. There Could Be Outstanding Liens 

Homeowners who can’t pay their mortgage might have had other issues regarding home expenses. For example, perhaps there are some outstanding property taxes or homeowners association fees, or it could be that the previous homeowner never paid contractors, which could result in a lien being put on the home, which you will likely have to pay for if you buy the home. 

Know Your Laws: Some provinces may limit how much you need to pay on outstanding liens when you buy a foreclosed property. Always talk to your realtor about this before investing in such a home. 

Talk to Our Calgary Realtors Today 

At Mel Star, our team of top Calgary realtors have sold thousands of foreclosed properties, so we understand the ins and outs of this complex process! We are happy to help you navigate this situation as smoothly and successfully as possible, ensuring you get the best price for your dream home. 

To find out more, contact us at (403) 284-6333 or fill in our contact form.