In today’s real estate market, more and more foreclosed homes are becoming a viable option for home buyers compared to buying new homes, because they are often sold below their actual market value. However, which of these options will give you a better value in the long run? Here are some points to consider when choosing between a new home and a foreclosed home.
Which would you consider buying - a new home or a foreclosed home?
On one hand, many buyers choose foreclosures because they are sold at much cheaper prices. However, most foreclosures are sold “as is,” meaning it is the responsibility of the buyer to shoulder the costs of repair on the property. The previous owners, being unable to pay for their mortgage any longer, may allow the home to fall into disrepair. Unlike new homes, foreclosures are often in need of maintenance, and are not protected by any warranty. New homes are usually covered by a warranty from the builders, which will cover any defects or flaws in workmanship and materials as well as the structure of the home for a short period of time, so the buyer will not have to worry about shelling out for maintenance fees and repair.
One the other hand, when purchasing a new home, you are the first owner. Everything is brand new and you will not have to worry about any surprise fees to pay. Unlike foreclosed homes, you may also move in immediately, or within a time frame that you can control. A foreclosure process may take up to months until you can fully move in.
In the end, buying a foreclosed home or a new home depends on the personality of the homeowner. If you are the type who enjoys undertaking home projects or fixer-uppers, a foreclosed home may be the right choice for you. If you don't like the idea of refurbishing and renovating, a new home might be the best bet when choosing to buy property.