5 Things You Should Know About Buying Foreclosures in Philadelphia

Buying Foreclosures

Buying Foreclosures in Philadelphia

An exciting way to invest in real estate is by buying foreclosures in Philadelphia. You see it on reality TV shows on HGTV, where investors can pick them up at a low cost, invest some money in repairs and upgrades, then turn around and sell them for a significant profit. It is not always as easy as the tv shows seem. Many of these remodeled homes are in western states, where the houses are usually built later than the 1970s. If you have noticed, about 90 percent of the homes in Philadelphia were built in the early 1900s. In older homes, most people do not realize that once you tear something, you will find more issues with multiple items. Many homes in Philadelphia have not been worked on in years. They are making rehabbing a home a complicated process. There are five things you should know about buying foreclosures in Philadelphia.

Inventory is Dropping

The first thing you should know about buying foreclosures in Philadelphia is that the overall availability of foreclosed properties is shrinking. There are fewer and fewer foreclosures every day, and the available ones are getting snatched up by cash buyers that move exceptionally quickly. We can help you locate foreclosures in Philadelphia; give us a call at 215-359-6090 right now. If you are a long-term investor in Philadelphia, the city of Brotherly Love, you may have noticed that good deals are harder to come by. With many new style investors purchasing in the city of Philadelphia. It is driving up the asking prices on many different homes. Being the first and only to a deal is almost nonexistent anymore.

Buying at Auction

Buying foreclosures at an auction is probably not a good idea unless you are an experienced real estate investor with a lot of cash to drop on a property real estate investor with a lot of money to drop on the property; buying foreclosures at an auction is probably not a good idea. At the foreclosure auction, you are not allowed to enter the house nor have it inspected, so if you win the property, you have no idea what condition the building is in, and you may ultimately lose out. There used to be a day when investors could obtain decent deals at the city foreclosure and delinquent tax actions. Now, investors are staying far away from these public auctions because prices are being driven to ridiculous amounts.

Buying Bank-Owned

You can still get a good deal on a foreclosure if it is bank-owned, but you may have to make a higher bid if other foreclosures are selling fast. This means other people are buying up foreclosures quickly, and if you want to get in on this action, you may have to start with an offer close to or at the asking price. If there are multiple offers, you may have to offer higher than the asking price and keep the contract contingencies to a minimum if you want that foreclosure. Remember, location and amenities matter; other foreclosures may sell quickly if they are in a great spot.

Get it Inspected

In most cases, the seller of a foreclosure is a bank, so there is no traditional seller to make repairs before closing. The bank will not likely fix anything wrong with the home. They are selling it to make as much money back on their investment. Ensure you include an inspection contingency to hire an inspector if you make an offer on a foreclosure; that way, you will know precisely what you are getting into if the bank accepts your request. 

Hidden Costs

Buying foreclosures in Philadelphia may come with additional costs above and beyond the purchase price and closing costs. Suppose the owner couldn’t make the mortgage payment. In that case, you can probably assume they did not pay the real estate property taxes or homeowners association fees if the foreclosure is in a community. You might also become responsible for utility bills, home equity lines of credit, or other liens on the property. Ensure the title company considers these factors when preparing the title commitment. 

You will also have to consider the additional cost of making the necessary repairs or cleaning when you buy a foreclosure. There is no cleanup requirement when these properties are seized, and the previous owners might be slightly upset about the bank foreclosing on them and taking them out on the property. Repairs to the home might also increase the assessed value and raise the taxes.

At Buying Property 215, we make it easy to buy a foreclosure. Call us today at 215-359-6090 or email us a message to discuss what you should know about buying a foreclosure in Philadelphia. We can find the perfect one for you!

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