Buying Real Estate Foreclosures
Steps to Take When Buying Real Estate Foreclosures
- Research the community of the home and the market value of similar homes in the area.
- Find a real estate agent that is experienced in foreclosures.
- Search for foreclosed properties in the area you are hoping to make a purchase.
- Check the Public Default Records - this is an important step and may save you lots in the end!
- Check for any additional liens on the home - these other liens can raise the price of the property quickly and bring you unwanted expenses after you purchase the home.
- Find out which phase of foreclosure the property is in and when it will be owned by the bank.
- Get pre-approved for your mortgage or ensure you have enough cash available to purchase the home.
- Attend the auction and place your bid or prepare to make an offer to the seller.
- Get a Home Inspection - Before finalizing any deal, be sure to get an inspection on the home if it’s allowed.
Finding a Real Estate Agent
When you are choosing your real estate agent consider the following:
- How much experience do they have with the local market?
- Do they hold an REO certification or have additional training?
- How long have they been working with foreclosure properties?
- Do they have expertise in the type of sale you are hoping to pursue (HUD, short sales, etc.)?
Click here for more information on finding an agent.
How Much Are You Willing to Pay?
When determining how much you are willing to pay for the home you will want to look at the following:
- Your own personal finances and how much you can afford
- The fair market value of the home
- The value of surrounding homes
- What repairs will be necessary
If the house has been on the market for less than 30 days, be prepared to pay the full asking price. If the house has been on the market for more than 30 days, you may be able to negotiate a deal that is 10% or more below the asking price. Again, this is where your experienced real estate agent is a crucial asset towards securing a good deal.
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