Foreclosure sales present a number of risks and therefore are not for everyone.
Risks* include:
- Unknown property condition. In most cases, neither the buyer nor the mortgage
company has the opportunity to walk through the property before the sale. As a result,
the condition of the property is not known.
- Eviction. If the property is currently occupied, the purchaser of the property
is responsible for evicting the residents, which can be time-consuming and costly.
- Redemption. In many states, borrowers may have redemption rights, giving
them a set period of time after the foreclosure sale during which they have the
option to "buy back" the property.
- Liens. While some liens are eliminated by the foreclosure sale, there are
certain liens that are not eliminated and therefore remain valid liens against the
property.
- Costs. In some states, there may be fees associated with the sales process.
- Delays. In some states, the sale is not final at the time of sale, meaning
that there could be delays before the buyer has access to the property.
- As Is. The property is acquired "as is", without title insurance or other
types of insurance.
*This list is not intended to be an exhaustive list of all risks involved in purchasing
property at a foreclosure sale. You should seek the advice of an attorney in your
area for a comprehensive list of risks involved.
Possible Rewards* include:
- In most cases, the transaction is commission-free.
- The possibility of purchasing a property below current market value.
*This list is not intended to be an exhaustive list of all rewards involved in purchasing
property at a foreclosure sale. You should seek the advice of an attorney in your
area for a comprehensive list of rewards involved.
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