Buying a foreclosed property in Downtown Boston could be your chance to land a gem of an investment at a very nominal price. It is important to note, however, that there are a number of serious risks that must be accounted for. If you don’t know how to mitigate these risks, this type of investment could set you up for considerable loss. Following are the basic benefits and drawbacks of buying foreclosures.
The Benefits of Buying a Foreclosure
Buying a foreclosed condo in Downtown Boston will allow you to get a price that’s well-below market value. For many consumers, this can even make all-cash transactions possible. With an all-cash transaction, there are no interest rates to worry about and closing costs are significantly lower. If a foreclosed home gets lender approval, buyers with insufficient spending power for purchasing homes on the traditional market can secure smaller loans for their far more modest financing requirements.
Gain an Advantage at the Negotiating Table
When homeowners are in pre-foreclosure, they’re usually looking to wrap things up as quickly as possible. This puts buyers at an incredible advantage at the negotiating table. It also ensures a swift closing. There are foreclosures and pre-foreclosures available at all price points, and it’s also possible to find options that are only in need of very modest repairs.
The Drawbacks of Buying Foreclosures
Due to their below-market prices, foreclosures tend to draw massive amounts of attention. Thus, although a low listing price might lure you in, you could find this price quickly escalating. Buyers should know that foreclosures aren’t necessarily cheap either. Sellers who are in pre-foreclosure may price their properties higher than their actual value in an effort to pay off their mortgage debt. Worst of all, getting financing for a foreclosed home can be a lot harder than financing a traditional purchase. Lenders are often reticent to back buyers in these transactions due to the additional risk they entail.
There’s also the potential for these properties to be in a considerable state of disrepair. When unable to pay their mortgages, most homeowners don’t invest in important improvements or repairs. Moreover, foreclosed properties bought at auction are sold without proper home inspections. Auction foreclosures often make it necessary for buyers to make same-day, all-cash payments as well. In these instances, investing in foreclosed properties is done at a tremendous risk and may or may not provide worthwhile payoffs.
Navigating the home buying process can be tricky, especially if you’re considering foreclosed properties. Working with an experienced agent who is familiar with the area as well as foreclosures can help you minimize your overall risk and maintain your long-term financial goals. For more information on condos for sale in Downtown Boston, call us and schedule an appointment today.
Over the course of 20 years in the Boston downtown real estate market, John represented and sold numerous, condominiums, investment and development properties in Greater Boston and in the surrounding suburbs
In addition to representing Boston condo buyers and sellers, John is currently one of the most recognized Boston condo blog writers regarding Boston condominiums and residential real estate markets. John's insights and observations about the Boston condo market have been seen in a wide variety of the most established local & national media outlets including; Banker and Tradesman, Boston Magazine The Boston Globe, The Boston Herald and NewsWeek and Fortune magazine, among others.
For over 24 years, John Ford, of Ford Realty Inc., has been actively involved in the real estate industry. He started his career in commercial real estate with a national firm Spaulding & Slye and quickly realized that he had a passion for residential properties. In 1999, John entered the residential real estate market, and in 2000 John Started his own firm Ford Realty Inc. As a broker, his clients have come to love his fun, vivacious, and friendly attitude. He prides himself on bringing honesty and integrity to the entire home buying and selling process. In addition to helping buyers and sellers, he also works with rental clients. Whether you’re looking to purchase a new Boston condo or rent an apartment, you’ll quickly learn why John has a 97% closing rate.
Charles River Park
Surrounding Communities of Boston
John Ford and his staff can be reached at 617-595-3712 or 617-720-5454. Please feel free to stop by John's Boston Beacon Hill office located at 137 Charles Street.
Ford Realty Inc
137 Charles Street
Boston, Ma 02114
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