Considering the mass attention that foreclosures have been getting, many potential buyers may be wondering, "Why Buy a Foreclosure"? The sad fact is that a foreclosure carries a negative stigma.
Once a house has been repossessed, or even when it is in the process of foreclosure, it begins to develop an aura.
Many would be home buyers quickly and uniformly dismiss all foreclosures as they think that the foreclosure is neglected.
The buyers feel as if something must be wrong with the property.
And the buyers are right.
Something was wrong...
the previous owners stopped making the payment.
Nothing more, and nothing less.
When considering a foreclosure as a new home, it is critical to remember this very simple aspect.
The only difference between the foreclosure home, and the natural MLS listings, is the previous owner's payment history.
So, if everything else is equal, then why buy a foreclosure? The answer is simple, everything else isn't equal.
There is a main point of difference that cannot be ignored.
When dealing with a foreclosure, you are not dealing with a typical seller.
You are dealing with a fully qualified and unemotional seller.
When a typical American makes a buying or selling decision, they decide what to do emotionally, and justify that decision with logic.
This can lead to irrational decision making on the part of a stress burdened seller.
When a bank makes a decision, they decide which course of action they expect to cost them less money, or to make them more money.
Period.
In my opinion, the why to buy a foreclosure question is absurd.
In the majority of cases, the banks are ready to sell property at prices that are below loan satisfaction.
In addition, many are eager enough to sell that they will let property go at 40% discounts.
They do this because their carrying costs are tremendous.
It is cheaper and more cost effective to pass the discount on to the new buyer and cure a bad loan while removing a property from their inventory.