You are ready to purchase a property. However, you’re also looking for a cheaper deal, and a foreclosed property sounds like the best answer. Foreclosed properties usually come at a lesser price, and often much less compared to properties listed and being sold on the market by owners and real estate agents.
But you probably don’t know is that purchasing a foreclosed home can also be challenging to anyone who is not an expert real estate investing. Also, some foreclosed properties may come with several damages that need repairs to make them habitable, can easily add up the costs on their sale prices.
So if you’re planning on purchasing a foreclosed home, here are some of the things you should know.
Prep Yourself with the Basics
There are two ways of buying a foreclosed property. First, lenders sell off properties after the owners of those homes stop paying their payments. These homes are then put on sale on the market for public auction.
The second way which probably works better for some buyers who aren’t expert real estate investors is to purchase a home after a bank takes its ownership. These properties are sold and listed by the real estate agents. You can acquire them just as you would buy a property marketed more traditionally.
Go with Professionals
These steps for buying a foreclosure should be simultaneous. While you’re searching for a real estate broker, who serves directly with the banks that own foreclosed properties, also get a preapproval report from a lender.
Also, remember to look for a real estate agent who is proficient in the complicated market of foreclosure. Whether you’re searching for a bank-owned property, pre-foreclosure, or short sale, you’re going to need the supervision of an expert who has experience in selling and buying these types of homes in your local market.
Expect the Delays
Purchasing a foreclosure is complex rather than acquiring a traditional property. The process of foreclosure includes the waiting periods, which differs from place to place. If you’re getting a property from the bank, there are usually layers of necessary approvals along the way.
Thus, when a single missing signature or a document filed is not correct, previous owners can file for bankruptcy protection. Both of which can delay or stop the sale. In other situations, post-sale legal arguments can delay the closing of sale for weeks and even months.
Do All the Inspections
Never acquire a foreclosed property owned by a bank without hiring a home inspector to examine it first. Unlike with a foreclosed property bought at auction, you always have the right to inspect a home before closing the sale. Hence, make sure to take advantage of this opportunity.
Briefly, do all your inspections if you needed. If you need a structural engineer, have a trusted engineer to come out. The more you know about that particular property early on before getting an offer, the better prepared you will be in deciding whether to buy or not to pursue the property.
Get Your Funds Ready
Such in any competition, having an advantage over other buyers will surely give you higher chances of getting any foreclosed home that you want. Thus, when you already have been qualified for a housing loan by a financial institution or a bank, you will draw more attention from the sellers.
They will recognize that you are a serious and credit-worthy buyer who has an approved housing loan that you can use anytime. Through this, you will have more bargaining edge compared to other buyers.
Foreclosed homes are non-performing assets. Thus, lending institutions and banks who own these properties are actively selling them the best way that they can. Indeed foreclosed properties come with discounted prices and often less outstanding taxes.
Whether you’re planning to purchase a foreclosure, consider the tips mentioned above. Moreover, you can visit Rose & Jones and some real estate for assistance when buying a foreclosure.