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What homebuyers should know about buying a house in foreclosure

For real estate investors who like to flip houses, foreclosed homes can be one opportunity to give new life to an unfortunate circumstance. There is a great deal of work that goes into fixing up a home that was once in foreclosure, especially if its condition is poor. However, Alberta designers and real estate professionals have some tips on how to prepare for this venture.

Those looking to flip a home that was in foreclosure should be prepared to put in what is referred to as "sweat equity." This means not only money, but time and effort are likely needed to bring the home back to life.  This is especially true as foreclosed homes are typically not warrantied, making them a bigger risk despite the apparent lower price tag.

When purchasing a home, typically a person can make the sale conditional upon a home inspection. When buying a foreclosed home, this is not the case. It is a good idea to take someone with renovation expertise on a walk-through of the house and to carefully consider all the possible repairs and expenses needed. Working out an expected price range for these fixes prior to buying the property is also a good idea.

It is easy to see why a foreclosed house might be attractive to an Alberta home buyer. The lower price tag can be very inviting, and some people are certainly up for the challenge of fixing such homes up. However, understanding the real estate laws around buying a home in foreclosure is important in order for people to know exactly what they are getting into. For that reason, consulting a lawyer throughout this process is a wise decision.

Source: reddeerexpress.com, "Ideas for sprucing up a foreclosed home", Kim Wyse, March 7, 2018

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