Foreclosures

Boomerang Buyers: Don’t Be Afraid to Buy a Home Again!

Boomerang Buyers: Don’t Be Afraid to Buy a Home Again! | Simplifying The Market

According to CoreLogic, from 2006 to 2014 “there were 7.3 million housing foreclosures and 1.9 million short sales.” The hesitation some Americans feel after experiencing a foreclosure brings to mind the old saying: “Fool me once- shame on you. Fool me twice- shame on me.

According to the 2019 Home Buyer Report from NerdWallet,

Thirteen percent of Americans have lost a home due to a financial event such as foreclosure in the past 10 years. More than 6 in 10 of them (61%) have not bought a home since, and 20% of those who haven’t repurchased say they never plan to again.”

This makes sense. They don’t want to go through the same pain again. As a cornerstone of the American dream, nobody wants to lose homeownership. But let’s illustrate this simply: Recall learning to ride your first bike during your childhood. Did you stop riding it because you fell on the ground and scraped your knees? Or did you get back on and try again until you were able to ride without falling?

Purchasing a home is not as simple as learning to ride a bike, but the concept is the same! There are many things necessary to learn that affect the ability to get the financing needed to purchase a home. Past occurrences can determine if there is a waiting period. In other words, you need to let your knees heal before you try again!

As we’ve mentioned in the past, homeownership has many financial and non-financial benefits. Each person needs to go over the pros and cons, taking the time to figure out what is best for their family. Should they continue renting, or should they try to buy again?

The good news is that some “boomerang buyers” are getting back into the market. They’re getting back on their bike!

“Of 2.8 million former homeowners whose foreclosures, short sales or bankruptcies dropped off their credit reports from January 2016 to November 2018, 11.5% have obtained a new mortgage, according to a study by credit rating agency Experian for USA Today.”

NerdWallet’s report also mentioned:

  • 6% plan to buy a house this year.
  • 39% intend to buy over the next 3 years.
  • 58% say they will purchase within 5 years.

Bottom Line

If you lost a home due to a financial event but would like to review your options, let’s get together to help you create a plan to obtain a home in the future!

Tips For Buying A Foreclosed Home

Many people are interested in buying a foreclosed home because they typically sell for cheaper prices than comparable homes in the area that have not been foreclosed upon. However, many people aren’t aware of all of the risks involved in purchasing a foreclosure. The risks are minimal if you do your research though. From CNN, here are some tips for buying a foreclosed home.

 

First, it is important to know what a reasonable price for a foreclosed home is. This means, you should know the prices of comparable homes in the area that have sold. The bigger the gap in price is between a foreclosed home and a non foreclosed home, the more work a home needs (generally). Don’t be fooled into thinking you’re getting a great deal on a move-in ready home; you need to account for the fact that buying a foreclosure almost always requires that you put time, money, and effort into making it ready for living in. Moreover, you need to make sure that you are prepared to take on the project of repairing a home.

With that in mind, you should get a home inspection, if at all possible, or at least inspect the home yourself. This is the best way for you to get an estimate of what repairing and updating the home will cost you. A home inspector can tell you if there are any out of date or non-working systems (electrical, heating, cooling, etc.) and what needs to be done to ensure your safety and comfort. This will allow you to assess how much money, time, and effort will have to go into the home. From here, you can determine whether or not you can afford to purchase the home.

Also, be sure to look into the neighborhood and surrounding homes and areas. If there are numerous other homes in the area that have been foreclosed upon, it’s probably not a good idea to buy the home. This is because areas with a high number of foreclosures (regardless of the reason for it) have lower property values than areas with a negligible number of foreclosures.

Do not buy a foreclosure in order to turn a quick profit. You should only buy a home if you are financially able, in need of a place to live, are happy with the area, etc. That is, you should plan to have to do at least a little work on a home that’s been foreclosed upon before even being able to live comfortably in it, let alone sell it for a profit. You can most certainly buy a foreclosure in the hopes of fixing it up and selling it for a profit, but it will most likely not be a quick process.

For more tips on buying a foreclosure, check out this article.

Susan Rupert Group

Realtor, ABR, CRS, SRES, MCNE, e-PRO
Kissinger Bigatel & Brower

2300 South Atherton Street
State College, PA 16801
Mobile/Direct: 814-280-0364
Office: 814-234-4000 ext. 3213
Email: Susan@StateCollegePARealEstate.com

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