![]() In addition, you may rack up other legal fees and, of course, the extensive repair costs often associated with a foreclosed home. You may inherit an in-process eviction, as well as any liens against the property that the bank has not resolved or disclosed. ![]() However, the numbers for bringing that house back to market value can really add up-especially if you buy from a local auction, like the Cook County Judicial Sales Corporation. COST TO REPAIRĪcquiring a foreclosed property can seem like a good deal, particularly when purchased at a price that’s below market value. Though these issues facilitate the potential discounts associated with REOs, remediating the condition of the home is rarely for the faint of heart. Some properties could even be occupied by squatters. If a home is left vacant for this long due to the extended time horizon to acquire and offload it, it may fall further into disrepair through neglect or vandalism. In fact, the average time for the foreclosure process, according to ATTOM Data Solutions, is almost 800 days. And, though foreclosure activity is down overall since this time last year in the Chicago area, it takes longer than ever for homes to be absorbed into a bank’s inventory. When forced to leave their homes through foreclosure, homeowners often take appliances and fixtures-anything of value-and leave behind only garbage and debris. Homeowners who cannot afford mortgage payments generally cannot afford the property upkeep either. The disadvantages of buying a foreclosed home, by contrast, are worth considering. And, it can seem like there’s always a steady supply here in Chicagoland. So, these properties are often offered at a discount with investors positioned to purchase them cheaply. Typical buyers are not usually interested and traditional financing is not always available. It’s no wonder that investors often focus on acquiring a foreclosed home-the advantage is certainly quite appealing. This shadow foreclosure inventory makes buying foreclosed properties in Chicago seem especially attractive, but the slow release rate increases the competition amongst real estate investors. ![]() That’s because banks are still not letting them go quite yet. Recent reports show that foreclosure proceedings are continuing to happen at a good clip, but inventory is slowly decreasing. PROS AND CONS OF BUYING A FORECLOSED HOUSE IN CHICAGOįoreclosures in today’s market still have the same benefits and drawbacks. So I started to wonder if it’s worthwhile to buy a foreclosed home at all. But it wasn’t only the economy that was growing the competition was growing too. After all, Chicago still had a foreclosure rate that was higher than most other regions of the country, even in the face of steady economic growth. I believed it was a safe bet for building equity and growing my real estate investment business. My goal had simply been to buy a foreclosed home in Chicago, rehab it, and then sell the property for a reasonable return. The bidders raised the price to near market value. After several frustrating weeks of silence, the bank ultimately rejected all offers and placed the home up for auction. When I finally found an REO that fit my criteria, I submitted what I thought was a competitive offer. And then, I put my energy into foreclosures. I searched for properties in the Cook County Land Bank. I bought lead lists to find motivated sellers. Back when I was a rookie investor chomping at the bit to grow my real estate portfolio, I spent a lot of time and energy chasing leads on cheap properties in our Windy City.
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