More people are purchasing homes and putting their roots down in Arizona. In fact, azcentral.com reports that home sales have increased nine percent since 2016, putting 2017 on track to be one of the best years for resale homes in the Valley’s history. Some of the homes that buyers throughout the state are snapping up are foreclosed on properties. While there are numerous benefits to purchasing these potentially discounted or quick sale homes, there are several things people should be aware of when considering a foreclosure home.
Complications with conventional mortgages
Conventional mortgages are typically limited by the property’s appraised value. When it comes to purchasing foreclosure homes, this may create issues as houses may receive extremely low valuations, depending on their conditions. Further, conventional loans may place requirements on the property’s condition, which is sometimes problematic as foreclosure homes are typically sold as-is.
Inheriting financial burdens
Sometimes, properties sold as foreclosures may have debts connected to them, such as construction loans, home equity lines of credit or unpaid tax obligations. While some such burdens may follow the previous homeowners, in other cases they may remain with the properties. In these situations, buyers may take on responsibility for those debts when they take ownership of the homes. Therefore, it is important for people to fully understand any financial burdens associated with foreclosure properties.
Sales are not guaranteed
Most people understand various types of contracts to be legally binding documents. This is not the case, however, when it comes to the real estate contracts for foreclosure homes. Although a buyer and seller may enter into a purchase contract in such cases, the deal may not be finalized until closing. Consequently, if a better offer comes in at any time before that point, an existing contract may be canceled.
Tough competition
On the whole, the rebound of the Valley’s housing market is a positive. However, this has made banks less desperate to unload these properties. Rather than looking to get them off their hands as quickly as possible, lenders that have foreclosed on homes may turn their focus to minimizing their losses. Therefore, buyers should prepare for the possibility of numerous other interested purchases, and a potential bidding war. Additionally, those looking to buy a foreclosure home should be aware that this might mean there is little or no room for negotiation on the purchase price.
Purchasing foreclosed homes in Arizona may allow families to move into their dream neighborhoods, get into homes that fit their size at an affordable price, or take a home with good bones and make it their own. Though, the legalities that may be involved may complicate the process, and potentially cost people the homes of their dreams. Thus, those who are considering buying a foreclosure property may find it of benefit to work with a legal representative.