Beware Foreclosure "Bargains"
Posted on Tuesday, October 18, 2011
Comparing a new home to a foreclosure on price alone is a mistake. You can’t put a dollar value on your peace of mind, safety, financial reserves and time — all of which could be in jeopardy if you buy a foreclosed home.
A foreclosure could have legal issues. There may be liens on the property for unpaid taxes or home owners’ association dues.
As soon as you take ownership of a foreclosed home, anything that breaks or any problems that arise are your responsibility. This could cost you lots of time and money that you may not have budgeted for.
With a new home, maintenance won’t be an issue for a while with the brand new appliances and systems. And if something does go wrong in the first year, there is a new home warranty that guarantees repair or replacement, including foundation.
Foreclosed homes sitting vacant for months or years, and if it wasn’t properly secured, there could be significant damage from water, mold, weather or pest infestations.
Finally — and most importantly — don’t forget safety.
New homes have been constructed under a strict set of codes and standards, and have to be thoroughly inspected before the certificate of occupancy is issued and you are allowed to close the sale and move in. No renovations or repairs.
When you are looking for a place to build a lifetime of memories, it may be well worth paying a higher upfront cost — and avoid the potential pitfalls of a foreclosure that could turn your dreams of homeownership into a nightmare.
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