Buying a St. Louis Foreclosed Home
A St. Louis foreclosed home can be a great buying opportunity for people looking for a permanent home as well as investors. Though some people think of foreclosures as bad properties in poor condition, not all of them are. A St. Louis foreclosed home just means that the previous owner could no longer pay the mortgage. Nowadays, banks and lenders who own these properties will usually make some general repairs before listing the property.
In today’s market, buyers can get great deals on these St. Louis foreclosed homes. If you’re considering one, here is what to know about buying a St. Louis foreclosed home.
A St. Louis Foreclosed Home can be Cheaper
In general, most banks price their foreclosures about 5 percent below the market value of the home. In the past, these homes were usually in awful condition, but they were about 15 to 20 percent below what the market value was. Today, most lenders and banks clean up the properties before reselling them.
While some of these properties can be good for new buyers, it’s usually better to buy a St. Louis foreclosed home if you have some experience with them.
The Properties can be Risky
Though banks do clean up these properties before selling them, they don’t make large renovations. Usually, they’ll clean the property and make it look nice for the big sale, but they won’t do any major renovations like rewiring or fixing structural issues.
These are big risks that you need to consider before buying a St. Louis foreclosed home. Sure, you may get a good deal on the property, but if you have to fix the home’s structure, then your good deal turns into a money pit.
Remember, these homes come as-is. If there’s a problem, it’s on you to fix it.
The Properties aren’t Usually in Good Locations
Regardless of your purpose for the property, you need a home in a good location. That means it’s close to transportation and is in a good area with good schools and low crime rates. Finding one of these properties isn’t that easy.
Though you can renovate a St. Louis home, you can’t renovate a location. When you plan to resell, your location will keep property values low, so consider location before buying.
Banks and Lenders won’t Negotiate
When working with traditional sellers, there’s usually more room for negotiation because buyers and sellers listen to and understand the other’s situation. Usually, they’ll make concessions for each other. With St. Louis foreclosed homes, the banks and lenders own the property, and they don’t care if you want to raise a family in the property or not. They’re just concerned with their bottom line.
Your bank or lender will be doing plenty of market research, and though they may be looking to unload a property quickly, they’ll usually hold out for the deal they want. Remember this before you bid.
St. Louis foreclosed homes can be great opportunities, but they come with a list of risks. Put yourself in the best position to succeed by understanding your foreclosed home’s risks and potentials before making an offer.