Many home buyers opt to purchase a foreclosed home because of
the savings. Properties are foreclosed when a homeowner can no
longer afford to make the mortgage payments. After three months
of non-payment, the lending institution will reclaim the
property, and resell it to another buyer at market value. Some
foreclosed properties are in bad condition; however, if you can
locate a foreclosed home in good or "move-in" condition, you
have stumbled across a great deal. Here are a few tips on
purchasing foreclosed real estate.
Carefully Consider the Pros and Cons before Buying Foreclosed
Real Estate
The major advantage of foreclosed real estate is the dollar
amount you save by purchasing the home at wholesale cost. On
average, expect to save about 30% when buying a foreclosed
property. This is perfect for investors looking for rental
properties or first time home buyers.
Because most properties are in good condition, the home may only
need minor cosmetic improvements. This may include a coat of
paint, new carpet, etc. Prior to submitting a bid for a
foreclosed property, it is important to have the home inspected.
If the home requires extensive repairs, realistically assess
whether you can afford the additional expense.
Select a Real Estate Agent with Prior Knowledge of Foreclosed
Properties
When purchasing a home, it is important to choose a good
realtor. Furthermore, many banks prefer working with buyers that
are represented by an agent. This proves that you are serious
about buying the property. Additionally, if you are a new home
buyer, an agent can guide you through the entire home buying
process and help you secure financing. Agents can also check for
liens against the property.
Conduct Your Own Research of Foreclosed Real Estate
Although an agent may have a list of foreclosed homes, it will
speed up the process if you have a list of prospected homes.
Thus, you should obtain a listing of homes in your area. To do
so, consider subscribing to an online service that offers
up-to-date foreclosed listings. Furthermore, government agencies
may have a selection of available homes. Also, research public
records. Before a lender or bank can foreclose a property, they
must file a notice with the country clerk.
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