Real Estate Tips: Buying a Foreclosure Home in San Francisco
Buying a Foreclosure Home in San Francisco. San Francisco is one of the most beautiful cities in the USA. The luxurious lifestyle, tech jobs, and developing markets have attracted residents from all over the world, but the real estate market is quite expensive here. The average home price is above $1 million as of January 2016. It seems impossible to become a homeowner in this expensive city, but you can think of some other options. To buy a house in San Francisco, some of you may consider Bay area foreclosure listings.
Bay Area Foreclosure
Bay area foreclosure listings can be found online. However, the bay area has less number of foreclosure homes compared to other cities in the United States. San Francisco is one of the five cities where 33% properties are equity rich. According to RealtyTrac, your property is equity rich if you have owned the property for 10+ years and the home worth is above $1 million. The RealtyTrac report shows that 378,186 homes in San Francisco are considered underwater either because of a foreclosure or other problems.
People are attracted toward Bay area foreclosure homes because of low prices. The lender may sell the property at a lower price to receive his original sum without making any profit. More often, banks are responsible for retrieving their money from the borrower. Bank management likes to get rid of the property quickly, so there are fair chances of finding a great property at a big discount. Here are a few things to consider before you buy a foreclosure home in the bay area.
Buying a Foreclosure Home Can Take Time
This process can take months or a week depending on the process. Three parties are involved in this matter i.e. the mortgage lender, the seller and the buyer. All three parties must sign an agreement regarding price, warranty and payment issues. Purchase foreclosure homes in those areas where you cannot afford a new home. If you can save $100,000 on a home, then the deal is worth some time.
No-Warranty
New homes come with a 1-year limited warranty and a 10-year structural warranty. This warranty can reduce your repair costs on the material and design work. A new home doesn’t come with any unpaid taxes or bills. However, a foreclosure home doesn’t offer any warranty, and it is your obligation to pay due taxes. No one will cover repair costs if you find defects in the property. You’ll be responsible for any repairs or bills.
Never Skip Home Inspection
It is often noticed that foreclosure homes look good, but you see many faults once you start living in the home. It is not unusual to notice leakage and structural damage after the payment has been made. Take a critical look at the home before you decide to buy the property.
Ask Yourself These Questions
1. You are purchasing an underpriced home. What if the home price declines by another 30%? Do you think it is going to be a great investment?
2. How much money will be required to flip the home?
3. Can you rent the home at a price that can cover mortgage costs?
Answer these questions before you buy a foreclosure home in Bay area. Buying a foreclosure home in SF can be a great or terrible decision depending on home condition, location, your experience and financial situation. We hope these tips will help you make a great decision. For any questions, please contact us.
Thanks.