Buying a foreclosed home can be quite the money saver when it is done right. However, not everyone who purchases a foreclosed home comes out on top financially. There are some things you should know about taking advantage of such homes so that you can avoid disappointment, costly repairs and other obligations. Read on to discover some tips on buying a foreclosed home.
What is a Foreclosed Home?
A foreclosed home is one that has been repossessed by the lender when the buyer has failed to meet his financial obligation to pay for the home due to any number of reasons. When the homeowner is unable to catch up or sell the home themselves, the foreclosure process begins. From there, the lender attempts to recoup his/her loses which means that the home can sell for well below market price. Many savvy home buyers regularly seek such deals with the intent of “flipping” the home or simply taking advantage of the discounted price.
Tips for Buying a Foreclosed Home
- Don’t go it alone: Purchasing a foreclosed property can be quite a complicated process. Therefore, if you are in the market for a foreclosed home, find a real estate agent versed in the complexities of the foreclosure market.
- Do not forego an inspection: A foreclosed property may seem sound on the outside but contain many problems that could cause more headaches than the home is worth. Find a certified inspector to go over the property and then tag along with him as he goes over the home.
- Check the landscaping: The condition of the surrounding landscape will tell you how long the house has been vacant. A home that has been vacant a long time tends to be more broken down and in greater need of repair than one that has been recently occupied.
- Check out the neighborhood: Just as you would with any other home, you will want to know about the condition and location of the home. You will want to get a clear picture of the neighborhood to find out if it is near businesses, highways, schools, etc.
4 Things to keep in Mind about Foreclosures
- Foreclosures are sold as-is
- A loan approval letter should be your first step.
- Know the neighborhood and what comparable homes are going for there.
- Know your budget.
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