First-Time Home Buyers, First-Time Foreclosure Buyers
By now it’s quite clear that foreclosure trends are on the rise in almost every housing market in the country. This presents extraordinary opportunities for first-time homebuyers who are looking to stop paying rent and start building equity in their first home. People who may have been new home buyers a couple of years ago are looking first at foreclosures, as these homes can be remarkable values in the short- and long-term. Here are some reasons why:
It’s a buyer’s market:
The seller’s market of just a few years ago has become a buyer’s market over the last couple of years as banks and other lending institutions are trying to sell foreclosed homes at the same time many buyers are wary. Lenders are in the business of financing homes, not owning them, so first-time homebuyers have a big advantage over sellers.
Huge inventory of foreclosed homes to choose from:
In nearly every housing market across the country, there is a wide range of foreclosed homes from which to choose. This is also advantageous for people looking for their first home as many of these properties are newer homes built just a few years ago.
Favorable interest rates:
Interest rates on home loans, especially for foreclosed homes, are at or below historic lows as lenders compete with each other for clients and the federal government tries to get the economy moving again. It still costs money to borrow money, but far less than it did just a few years ago.
Incentive programs:
Government agencies at the local, state, and federal levels are implementing a wide range of incentive programs targeting first-time homebuyers and trying to stir interest in foreclosed properties. A little time spent investigating these incentive programs can mean even bigger savings for first-time homebuyers if they’re willing to do some homework.
Despite all the advantages that first-time homebuyers have at this point in time, foreclosed homes also carry additional risk. The utilities may have been turned off by the utility companies or the current owner, and nothing is worse for a home than being empty for a long period of time. People interested in buying a foreclosed home should be extra diligent about having the home fully inspected by a licensed home inspector before signing any documents. There could be significant structural and mechanical flaws in the home that could quickly turn the elation of buying your first home into profound buyer’s remorse. However, if foreclosure trends continue as forecasters have predicted, first-time homebuyers have a unique opportunity in the coming months to save a great deal of money and get their first home at a great value.