Why are foreclose home bad

Question

I know this is a very silly question, but what are foreclose (if I'm spelling it right) homes and why are they bad? Is it bad for the buyer or the seller?

Answer 1

If you own a home and cannot make the mortgage payments, your house begins the foreclosure process.  There are opportunities to sell your house or make up for the missed payments before your home completes the foreclosure process, but if this doesn't happen, you are evicted from your house.  Not only is it bad to be evicted, but a foreclosure also negatively affects your credit score.

If you're a buyer, you may be able to pay below the market price for the home by buying it from the owner in a short sale (before the house is foreclosed), winning it in an auction, or by buying it off the bank after it is totally foreclosed.  The dangers for buyers getting a foreclosed home include: the house may be sold as-is, meaning that you have no warranties on the condition of the house; because the foreclosure process is not a happy time for the original owner, they may destroy parts of the house in their frustration (other damage can be done by looters while the house is vacant, as well); the process of buying the house from the bank can take longer; and there may be liens against the home (e.g. backtaxes, utilities) that you may be liable for upon acquiring the home (this means that you'll have to pay more for the house for things the previous owners didn't pay).  There can also be issues with the title.  Also, unless you can do the repairs yourself and/or you know reputable repair people, making the house liveable can cost more than the fair value of the house in the end.

It can be a complex and messy process.  If you're considering buying a foreclosure, hire an agent to represent you who can discuss these issues with you in depth.  Good luck!

Answer 2

Foreclosures are bad for the owner, whose equity is wiped out along with his credit rating, and for the lender, who doesn't get all his money back.  But buyers of foreclosed properties can sometimes get a good deal; the lenders are motivated to get rid of the property and may take a lowball offer.  But such properties may require significant repairs before a buyer can live in one.

Answer 3

the seller is the bank, the owner lost their home... the bank forclosed it. Sometimes when the owner knows their gonna lose it, they tend not to keep up the house. You might have a lot of work to do to the house.

Answer 4

It's bad for the person whose home is forclosed! A forclosure on a home is when the bank takes possession of you house because you can't afford the mortgage payments. They evict you and you have to find somewhere else to live...even if you've lived in that home for 20 years.