Where to Start If You Want to Purchase a Foreclosure Property

The foreclosure market provides homebuyers with numerous opportunities, but purchasing a foreclosure property can often be much more complicated than expected. That’s why were here to help you do your homework and find the perfect home that fits your budget and needs.

Before you jump in and start submitting bids for fixer-uppers, consider the following:

1. Take off the Blinders

While searching for a foreclosure property, you have to keep in mind that foreclosures always come with baggage. Some repair work will certainly have to be done prior to your move in date and the person who will be responsible for it will probably be you. Foreclosures’ prices are rarely a subject to negotiations as these properties are often competitively priced, but there is also a great chance of liens against the property.

A lien is any legal claim on a home granting the right to keep possession to another person until a debt owed by that person is discharged. There are various monetary encumbrances that you may encounter in a foreclosure situation and each one is another complication that could keep you from owning the home.

In case you are not 100% sure what you want to purchase, it might be a good idea to also check the traditional listings in the desired neighborhood. Keeping an open mind while searching is important. You never know what will turn out to be the best deal until you’ve researched every home and every option.

2. Get Some Help

Having the support of an experienced real estate agent who knows the complexities of the foreclosure market really well is a guarantee to a successful purchase. Professional guidance will help you understand all the advantages and downsides of bank-owned properties, pre-foreclosure and short sales.

Of course, you should not forget that realtors are not lawyers. There may also be some tricky moments as foreclosure regulations vary from state to state, so it will be best for you to have legal advice from a local attorney as well.

3. Know What You Can Afford

You have to make some serious decisions about how much money you can spend or which neighborhood you want to move into. The clearer your location, size and cost criteria is, the faster you will be able to find and close the deal. Check the recent sales to get good knowledge of the local foreclosure market; this is going to help you bid a fair price according to the property’s condition.

Securing your financing early is essential, because it will allow you to immediately purchase the desired property. That means your first step should be to get pre-approved for a mortgage loan.

4. Don’t Skip the Inspection

Of course every house for sale looks good, but if you are not a certified home inspector, you will probably discover its real problems after you have moved in – when it’s too late. Avoid potential problems inside the foreclosure property’s walls or under the floor by hiring an expert home inspection service. The experts will charge you a few hundred dollars but they will also prevent you from spending thousands for future repair work.

5. Think about the Future

The value of a foreclosed property might decline further as time passes. When it comes to purchasing a foreclosure, the smartest approach is to think long-term. Try to assess the property’s value after 5, 10 or 15 years. Think about what you will do if you cannot resell it and calculate precisely whether you will be able to handle to long haul. Buying a house is a serious step and it has to be taken very carefully.

Purchasing a foreclosed home may seem very overwhelming, but if you are well prepared, nothing can get in the way between you and your dream home. Reach out and we’ll match you with a First Team foreclosure specialist in your area to help you make the smartest decision for you.