What is the difference between buying a foreclosure and buying a regular home for sale?

Question

What is the difference between buying a foreclosure and buying a regular home for sale?

Answer 1

1 - Foreclosures are sold as is.  On a "regular" home, repairs could be negotiated.

2 - At least in Texas, the disclosure laws are different for foreclosures.  Most home sellers need to disclose known defects.  There are eleven situations in which no disclosure is required.  "Lender owned" is one of those eleven.  Note that "house is owned by an investor who never lived in it" is NOT one of the eleven.

3 - On most regular sales, the seller must at least get enough to "zero out".  On foreclosures, the lender has the option to lose money (get less than what they had into the property) if the market is really bad.

On any sale, usually, the owner (person living there, OR the bank) would like to get all that they can for the house.  On most  cases, banks lose money when they sell a home they have foreclosed upon.  That's why they are so willing to work with homeowners right now to NOT foreclose.

Answer 2

The foreclosure will generally be sold as-is, since the bank really can't say what, if anything, is wrong with the property.  Also the foreclosed property will probably need some work, maybe alot of work.  Still, since the place needs work and is being sold as-is and since the bank probably jsut want to sell the place quickly for whatever they can get, the place will probalby be sold at a good price (below market even when taking the fixup costs into account).

Answer 3

You can generally get a foreclosure cheaper, however the condition of the house could be bad and cost you in the long run  

Answer 4

a foreclosure is a distress sale. . . .the bank is trying to recoup what they can. . . .the home may be available for less than market value due to it's condition, ownership, desperation, etc.. . . .the bank wants to recoup its mortgage and additional costs, which may be less than market value. . . but in this market, not necessarily so. . . .

however, any seller, whether homeowner, bank, or bottomfisher, wants to get whatever the market will bear. . .preferably market value,  while purchaser wants to get a deal

Dealing with a bank can take longer and be frustrating, but sometimes you get a lower price in the end

Answer 5

many times the foreclosure is a steal as the lender wants to be made whole if at all possible but they will often settle for less just to move  the inventory