While purchasing a foreclosed home can be a wise investment opportunity, there are certain things potential buyers must consider. Although foreclosures are generally priced below market value, you need to understand what you are purchasing. If you are interested in buying a home, help is available from experienced professionals in the field. Since there are different types of foreclosures, you will need make sure you understand which best suits your needs.
Instructions
1. Know that are different types of foreclosures. A REO-property is a home that has been foreclosed and is now owned by the bank. Foreclosures are also sold at public auctions. If a home is in foreclosure, some homeowners attempt to sell the home in a short sale for less than the balance owned on the loan.
2. Search for properties. If you have cash on hand, attending an auction may allow you to purchase a home below market value. Refer to the classified section of your local newspaper to find auction listings. If you need financing, consider REO properties or short sales. Some banks, such as SunTrust, provide a list of their REO properties. You can also find foreclosures by searching the U.S. Department of Housing and Urban Development (HUD) website.
3. Contact a real estate agent to view properties in person. If you are considering an auction, a real estate agent is not necessary. Viewing dates are sometimes conducted before the auction. You can find a real estate agent who specializes in foreclosures by contacting the National Association of Realtors.
4. Explore financing options. Contact a mortgage company for pre-approval on a loan. You will need to be pre-approved before submitting an offer on a home, unless you are purchasing at an auction. Check with your county for specific auction registration requirements. In most cases, you will need to provide proof of funds and a deposit at the time of bidding.
5. Check to see if the home has any liens. Foreclosures can carry liens for things such as unpaid property taxes, back child support or other judgements.
6. Hire an inspector. Foreclosures are sold on an as-is basis. Unless your contract is contingent upon the home passing inspection, the buyer is responsible for making any necessary repairs.
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