Eric Cleton Review Of The Pros And Cons Of Foreclosure Properties

Eric Cleton and I wished to talk about foreclosure properties and look at the pros and cons of shopping for one. So many people are jumping on the foreclosure band wagon and without doubt there's profit to be had, but, the challenge is do the advantages outweigh the drawbacks?

So what are the advantages of buying a foreclosure property?

For anybody not aware, a foreclosure is a property owned by a bank or another lender that the previous owner was not able to keep up the mortgage payments on. The benefit of this for the new owner is a property that is selling for substantially lower than a comparative non-foreclosure property.

This is an excellent prospect for someone looking to get onto the housing ladder or for someone looking to make an investment. You can get a property for less than its actual value and look to make money on rent. Or if you are planning on living in the property, know, unlike in most cases at the moment, that the value of your house will actually increase over time.

You are also in a very strong position with the bank, which does not happen to many of us all that often! In short, the bank or lender views the property as a financial burden. The foreclosure process is not a cheap one for the bank and this is in addition to the amount they probably lost on the defaulted mortgage.

This means you are in an ideal position to negotiate relating to the overall price and the additional costs associated with a house sale. The bank is looking to offload the property as quickly as possible to re-coup their losses and you can take advantage of that fact.

Finally, foreclosures are at an all time high right now. Whereas previously they were hard to locate, now foreclosure auctions are fairly well advertised and can be easily located. This cuts down time and effort for you.

So what are the disadvantages?

Well, first of all foreclosure properties are often known for being a little shabby. It is unlikely that people who are about to leave their home will keep it to the highest standard. There may be some basic repairs or a garden to landscape.

The other drawback is that you have less choice about where your property is located. Rather than identifying a few streets that you wish to live on, you may have to confine yourself to looking for properties in a particular area. You may also have to be less specific about the features of the house. But, often you have to compromise on your dream features when you are looking for any type of property.

In summary, if a great price is attractive to you and you have no issues with the work you may have to do to get the property up to standard then a foreclosure might well be a good option for you. It is a good idea to do some research before you attend a foreclosure auction as you need to be on the ball to make the most out of your money. Make sure you make the right choice to suit your circumstances.