Buy repo homes to save money in these trying times of high unemployment and tough financial situation instead of trying to keep up with the Joneses and hanker for that brand new McMansion down Main Ave. It may be your and your family’s financial undoing – like what the rest of America during the height of the financial crisis found.
If you need to move to a new place – probably because of new employment opportunities or the need to upsize or downsize your current abode – buying a repossessed property may be the wisest thing you can make. Buying and living in a pre-owned house is not as bad as it seems, and the recent housing market downturn has presented a lot of buyers with wider choices of properties – from rundown single detached homes to palatial mansions.
Oftentimes, if you buy repo homes, you may be presented with more financial flexibility as these properties are being sold for less than their market value, from 10 percent up to 60 percent discount. The institutions that have taken back these homes, either a bank or a government agency, want to dispose of these nonperforming assets as quickly as possible. They need cash right away to cover for the mortgage that borrowers could no longer pay for, so the lenders can recycle capital for their main business.
In addition, these institutions are not in the business of selling houses, so they would try to make the sale of foreclosed properties as attractive as possible.
Savings come in several forms. One, the most immediate savings you can see are the discounted prices that you will encounter if you buy repo homes. Second is the kind of financial support you may be getting from the seller or the bank for helping them get rid of these nonperforming assets out of their books. Some banks may offer you loans that carry attractive interest rates, installment cash payments, or even a rent-to-own scheme. It really depends on the institution, so shop around for the most economical and doable deal for you.
If you inspect the property and you see the amount of repairs that must be done, you can negotiate for a better price since you can say you have to carry the cost of doing some patchwork. But remember, some foreclosure auctions hold bidding for repo homes on an “as is” basis. Still, it does not hurt try.
So, go see now if you will be able to get a better deal if you buy repo homes than carry costly mortgage for a brand new house.