Why are forclosed houses not all the rage?

Question

I'm just wondering why these houses that are so much cheaper, yet nobody seems to buy them instead they go for the $300,000-400, 000 that put them close/near to debt, I know there is obviously there is a catch but what is it?

Answer 1

Houses that have foreclosed tend to be rather beat up.  As the homeowner has less and less money they can't maintain/ keep up their home, causing the new home owner to sink lots of money into the house to bring it back to market standards.  Not everyone has the money or the time to do that.

Answer 2

They are in bad neighborhoods and/or the previous owner didn't have the money to fix things that needed it so there is a lot of work to be done.  "Good" foreclosed properties are few & far between.

Answer 3

Because foreclosed homes are typically in poor condition, fixtures missing, walls missing, etc.  The person who was foreclosed on takes it out on the house.  People who want to buy a house want one that is ready to move in to....they don't want to put any work into it.

Answer 4

Like another poster said, foreclosures often have many things in need of repair. A lot of homeowners strip what they can from the house before it forecloses, and what they don't take gets stolen many times by theives who break in for such things as copper piping and wires and anything else of value. My husband and I are currently living in a house we bought with his cousin (everything is in his cousins name), we are unable to refi the house so our options are short sale (where we would still owe the bank some money) or to foreclose. My husband and I have put work into the house (redid one of the bathroom and updated some light fixtures), so I have been thinking too about what to do with the stuff we put in (leave it here or take it out and sell on craigslist). That is if we do decide to let it foreclose....

With the weak market, many are forced into "letting" their home foreclose, knowing that they can no longer keep up with the payment (usually an ARM, like ours, that goes up about 2% every 6 months or so). If you are considering buying a home, I would look into foreclosures. I know that I will in the future when we are ready to buy a home-alone. Think of it as instant equity if you find something with potential and in a good area. Personally, I would recommend a fixer house (including foreclosures) over a nice, already remodeled home.