New Home vs Foreclosure: Which One Should You Choose?10 October 2022
Practically speaking, secondhand goods and items are quite a steal, especially if you can get them at a slashed price and in excellent condition. In the housing market, you can either buy a brand-new home or buy foreclosed properties at much lower prices. If you're keen to own an affordable house and lot in the Philippines, the prices of foreclosed properties can be tempting. But when foreclosed assets are presented, usually in auctions, you have no idea of the current damage or condition unless you have physically visited the properties.
As a real estate investor, buying foreclosed properties can be a good strategy to grow investments. But just like with any investment, you must have a good eye and enough experience to stay on top of the game.
What Does Foreclosure or Foreclosed Property Mean?
When a home is in foreclosure state, it means the owners were unable to settle their mortgage and the lender has taken possession of the property. Real estate properties that have been seized by the lender because the tenant or owner hasn't made loan payments are called foreclosed properties. Real estate may also be foreclosed upon if the owner fails to pay the government's property tax.
Now, for real estate investors and homebuyers, it really looks like a great opportunity to acquire a new property. So, if you're contemplating either buying a foreclosed property or a brand new house and lot from premium residential developers like Lumina Homes, here are the things that you must consider.
5 Things You Must Consider in Choosing Between a New House and a Foreclosed Property
1. The Design of your future home.
Since foreclosures are already constructed, you don't have to start from zero. Whether you purchase a new home or a foreclosure property, you already have an idea of what your future home will look like.
New houses, however, often outperform the other option in terms of design. It's possible that previously owned homes, particularly ones built decades ago, are out of date. They might seem and feel out of place when they have elaborate characteristics. The most notable feature of such a design is its predilection for simplicity. For example, it says goodbye to multi-peak roofs. These days, a roof's simplicity is preferable. They are primarily simpler to examine and repair as a result.
2. Your comfort is important.
Indeed, newer houses are much more pleasant to live in since they are basically unused. Clogs won't be a problem for you any time soon but that's another problem that comes with foreclosed properties that have been used. Leaks and noisy pipelines are difficult to handle and you may need to call for professional help. That's an added cost.
Fair enough, not all foreclosed properties are unpleasant to live in. Those that were built recently may not have plumbing noise and other bothersome difficulties. Given that there were property owners there before you, it could be difficult for you to think of them as cozy. Even worse, they may not have bothered to tidy up or gather their belongings. Cleanliness must be a top priority before the transfer of the property from the previous owner to you.
3. Consider the ownership process.
Real estate ownership is a process that takes time to complete. However, if your real estate agent, broker, or seller is assisting you, it's definitely doable. If you choose a new home, there is a greater likelihood that the developer and realtor will work with you right away. And since you're looking for an affordable house and lot in the Philippines, they may offer flexible payment terms, discounted offers, and programs. They will then assist you in reducing your options so you can locate the best home alternative for you and provide you with all the help you need.
Purchasing a foreclosed home has another drawback. The original developer and architect could no longer be alive or available. As a result, you may need to employ a contractor to do several property inspections. There could also be a few haps in terms of the documents for the real estate owned by the previous property owner.
4. Your safety and security must be a priority.
A brand new home is in many ways safer and much more secure than a foreclosed one. The quality and safety of the materials used are easy to compare and the favor goes to the newly built property.
Since the structural components of a new home should still be covered under warranty, you can easily call the developers or responsible agents to help you out. Also, this spares you the trouble of seeking out a repairman on your own. The craftsmanship can also be covered by a guarantee. Though you may want to save up and just do everything by yourself, it's not recommended unless you're a professional. A temporary fix may just lead to a different issue and so on. So, it's crucial to consider your safety and security when deciding between the two options.
5. Calculate the overall costs.
The ultimate goal of a homebuyer is to acquire an affordable house and lot property without having to spend a lot. And if you compare the prices of foreclosed homes to the new ones, they're sold at a much lower price points. In fact, it's very easy to find foreclosed properties because they are usually at the top of many affordable houses and lots for sale property listings online.
However, the catch is you become at risk in every possible issues that come with the foreclosed house. You will need to cover the upgrades and the damages it may have. There could be broken windows, collapsed walls, old doors, broken ceilings, plumbing isuues, and problematic electrical system left by the previous owners. So, once you consider all the possible costs, do you think you're still saving from buying a foreclosed home? Will it be worthy to go through a foreclosure auction and sift through the available bank owned properties?
Acquire Your New Home Investment with Lumina Homes
With the risks that come with buying foreclosure properties or property, we highly recommend that you choose to buy a brand-new home from a credible residential developer like us, Lumina Homes. You won't ever have to worry about issues with the property title and real property taxes. With residential projects in over 50 key locations, you have more options to choose your brand new home in your preferred location.
The bottom line is, buying foreclosed properties have risks and benefits. The market value may appear as less expensive but could actually cost you more.
Ask a real estate professional to kick-start your investment property. There are lots of real estate investors who share positive views on turning a foreclosed property into an income-generating idea like a rental property.
Try Lumina Homes' loan calculator and get an estimate computation for your preferred Lumina property and home model.