Buying a foreclosed home can be very appealing. Many times foreclosed homes can be purchased at a discount. Foreclosed homes are bank-owned properties, which they’ve repossessed due to the owner not paying on the mortgage. The bank can be eager to sell the home resulting in a reduced rate.
While there are similarities to buying a regular home and a foreclosed home, there are a few things that you can do specifically when purchasing a foreclosed property.
Steps to Buy a Foreclosed Home
The first thing to do before buying any home is to get pre-approved for a mortgage. Essentially you need to know how much you can spend.
Find an expert realtor for foreclosed properties
Ask your friends, family, and connections on social media for recommendations on a realtor. An experienced realtor with foreclosure knowledge will be extremely helpful in the process.
Search and find your foreclosed property
Just like regular home-buying: don’t buy the first home you see (unless it’s amazing). Take your time and make sure the home feels right and is a good financial decision.
Make an offer
Negotiating a deal on a foreclosed property is different than with buyers. Because you’re working with a bank, they might take longer to respond and have different demands than working with a person.
Get a home inspection
This one is critical with a foreclosed property. Many times the previous homeowners didn’t keep maintenance up because they were struggling financially. Plus the contact at the bank might not know about problems that would normally be disclosed with the home. So make sure that any problems the inspection uncovers can be financially accounted for.
Close on the home and move in
Closing day on a foreclosed property is similar to any other – it’s exciting!
Foreclosed Properties – Are You Ready?
Foreclosed houses can be great investments and make great homes for years to come. Now that you know the steps on buying a foreclosed home, are you ready to start looking?