Good & Bad Things About Repo Homes
Non-traditional mortgages and adjustable rate mortgages written between 2000 and 2005 are among the myriad of reasons leading to large inventories of bank foreclosure properties, at time of publication. When the adjustable rates went up, the mortgages became unaffordable to the homeowner. The values of homes saw a decline in 2006. At that point, people who had an unaffordable mortgage couldn't even sell their homes to escape the burden of owning the home. In the end, the banks took possession of the home and forced the owners to vacate.
Other People Are Reading
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Good For Economy
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Home buying statistics are analyzed to calculate the financial condition in America. It's considered good when people are buying. When people are buying homes, it's thought that people are more confident in spending their money. When people read the reports they imagine that if everyone else is confident spending their money, then it must be okay to spend their own money. It's sort of a snowball effect.
Good for Buyers
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Banks don't want to own homes. Homes cost money. They must pay the taxes and maintain the property, including critical repairs and someone to manage the ownership, valuations, and sales of the properties. Banks want to sell the home quickly so they put a low price tag on it. This is great news for many who are in the market for a new home. It's also great for investors who want to buy the homes as rental property.
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Socio-Cultural Impact
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When a family is forced from their home, it can impact the neighborhood. If the evicted family was well liked by the neighbors, the new owners may not receive a warm welcome. The country-wide cultural effect can be negative as well. By buying these homes a message is sent to the bank saying that forcing people from their homes is okay.
It's seldom true that someone didn't pay their mortgage because they were a bad person. Foreclosure often happens for reasons beyond a homeowner's control. If there were a boycott on the purchase of foreclosures, the banks might reconsider their approach to the process.
Condition of Homes
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A person is never happy to be forced from their home. Many people become angry and damage the interior and exterior of the home. Blocking a septic system intentionally, for example, would cause considerable damage that would be pricey to repair. If the former owners were struggling financially, there might have been home maintenance and repairs that were ignored. The roof may have needed repair but it was too costly and it now has major leaks in it. Small repairs may have been given a band-aid for a fix when major surgery was really required.
A new buyer needs to look very closely at the condition of the home. It may have a great price tag, but consider the cost of the repairs. It may be easier and less expensive to buy a new home that's ready to be lived in without doing anything to it.
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References
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