With prices slashed below market value, these homes entice prospective buyers with the promise of the bargain of a lifetime. However, buying a Smyrna foreclosure home is not all magic and unicorns. They come with their own set of pros and cons, and like any other property, you must weigh these carefully before going all in.
Pro: Yes, they are cheaper.
In days past, Smyrna foreclosures were often 15 to 20% less than market value. However, the foreclosures of old were also typified by extensive damage or deterioration from neglect.
Today, Smyrna foreclosures are generally in better condition and typically sell for 5% less than the price of a comparable home that is not going through a Smyrna foreclosure. That may not seem like much, but when you take 5% of the average price of a single-family home in the US ($348,900), you get a savings of $17,445. That’s nothing to scoff at!
Con: They are notoriously risky.
Homes sold at a foreclosure are sold “as is.” No inspections, no disclosures, no recourse if the roof falls in after you’ve owned it for one week.
Banks often invest money to boost the curb appeal of a Smyrna foreclosure property, but there’s no guarantee that they have not also invested money to disguise serious structural flaws. When you buy a foreclosure home, you shoulder the burden for all less than desirable traits.
Con: They are often in rough neighborhoods.
Consider the reason for a foreclosure: the person living in the home was chronically unable to meet their mortgage payments. Perhaps the foreclosure was brought on by an isolated instance of misfortune, but more often, foreclosed properties are found in impoverished neighborhoods.
Con: Room for negotiation is “zero.”
When you take the traditional route to purchasing a home, your negotiations are supported by a team of professionals, and the seller on the other end of the negotiations will work with you to make sure the sell fits both of your needs.
When you purchase a Smyrna foreclosure, your bid is entered into a spreadsheet, glanced at by an asset manager, and accepted or rejected. Don’t expect any special accommodations or contingencies.
Con: The competition is fierce.
There are plenty of fish in the sea, and when a hook is baited with a cheap house, plenty of those fish will bite! Buyers who win Smyrna foreclosure deals often end up paying much more than list price to outcompete other offers.
Getting a great deal on a dream home is a dream come true. Sometimes, for some lucky people, that dream does come true. For others, foreclosures can turn into a nightmare. If you’re not willing to chance it, a Smyrna foreclosure home might not be right for you.