PLAINFIELD, N.J. (CBSNewYork) — Home foreclosures have skyrocketed since the financial crisis of 2007.
And experts say now, more people than ever are stepping up and buying those houses.
So could a foreclosure be your next dream home?
CBS 2’s Christine Sloan takes a look at what to do and what not to do.
A quaint house in the exclusive Sleepy Hollow section of Plainfield is a bank-approved short sale — going for $288,000, nearly $130,000 less than what the previous mortgage balance was from the previous owner.
The former owner of the home, which has a posh, updated bathroom, was offered an incentive to leave it in mint condition.
It’s great deal for buyers.
“You’re getting a lot more house for the money. Typically, we’re selling properties now that sold seven years ago for three times the value,” real estate agent Carl Reed said.
But blocks away, Sloan saw one foreclosed house that was rundown, with furniture and boxes of clothes still inside, going for $199,000.
When asked if she’d consider buying a foreclosure, Mary Reilly of Cranford said, “Sure, if the deal was right.”
The upside of buying a foreclosure is the low price, but there are negatives. For one thing, some banks will require perspective buyers to lay out the money for health and safety violations before closing. Permits are also required for almost everything.
“Such as a broken step, broken windows,” Reed said.
There are many ways to find out about foreclosed homes, including getting a list from your realtor or going to popular websites that deal with foreclosed homes.
Then there are auctions, but you’ll pay more. Experts say the abundance of foreclosures is threatening the prices of homes being sold by owners.
“My concern is that what I invested in my home I will not be able to get back,” said Olga Aquiles of Springfield.
What is even more alarming is experts like Reed saying more homes will go into foreclosure and it could take up to seven years for the market to turn around.
Until then, he said, it’s a buyer’s market.
When you’re buying, your evaluation should also include local schools, transportation and the surrounding area.