Buying a foreclosed home isn’t for everyone. You can save you a lot of money if you are prepared to put in the time, as it is a harder road to follow than buying a move-in ready place.
With the current looming uncertainty on how the world economic situation will play out in the coming months, there is a possibility that the number of foreclosed homes appearing on the market may increase, as some homeowners may find it difficult to meet their various debt obligations.
Here are the following steps on how to buy a foreclosed home:
Do your research properly
There is a lot of information on foreclosure property listings available on the internet. Your local realtor may also have a number of unique opportunities not advertised online or in local papers. Get a good idea on the price – whether it is a good deal or not, given the condition of the property and similar properties available on the market.
Determine what you are going to do with the property
Are you going to renovate and resell or are you looking to renovate and move-in? If you are going to renovate and resell, calculate the costs involved and gauge whether you will be able to get a decent profit commensurate with the time and effort spent.
Get preapproved for a mortgage
Buying a home with cash is the easiest option, but this is not the case for many homebuyers or would be investors. It’s best to get a rate and pre-approval before you start looking and putting offers in. This also portrays you as a serious buyer when you start the negotiations.
Find the right real estate agent
Don’t try and buy the property yourself, using the Internet as your teacher. Look for an experienced real estate agent who specializes in foreclosures. Buying a foreclosed home is more complex than buying a ready to move in home. The commissions are well worth paying for the experience and know how you are receiving in return.
Have The Property Inspected and Appraised
One of the easiest ways to make sure you’re getting a good deal is by having the property inspected and appraised for its value. While your lender might provide a similar inspection and appraisal, it might be better to pay for your own, just to confirm that you’re not buying a property that will never reach its full potential.
Buying a foreclosed home is a personal decision and it depends on a variety of factors, including your risk tolerance and potential reward, financing and ability to move quickly. You could reap big savings if the foreclosure is priced right, so don’t discount this type of listing in your home search. If you have any questions, contact us as we have the experience and know how in this field.