As homebuyers look for deals in times of uncertainty, many are becoming aware of foreclosed homes and the benefits that come with purchasing one. If you are interested in buying a foreclosed home, here’s what you might need to know.
Where Should I Buy?
Places affected by the housing crisis will likely be your best bet to finding a good foreclosure. You can research this and if you aren’t looking to move, you can find foreclosed homes in your area with a quick search.
How Do I Buy?
You can buy directly from the owner before they’re officially foreclosed on, or you can dive right in and try to compete with competitive investors at an auction. It’s safer and easier to find homes that are owned by the bank, also known as REO (real-estate owned). You can inspect these homes before you purchase, which is key when foreclosed homes are generally sold “as is” and can need many repairs. You can mortgage your purchase. You can be almost certain that the property’s title is free of liens, because the bank who owns it will typically perform a title search before they list the home for sale.
What Should I Expect?
While you can go solo, you should consider hiring an agent. Working with a real estate agent who specializes in foreclosures can be a huge time-saver. Keep in mind that foreclosure purchases in general aren’t always quick, as there may be unexpected issues and road bumps. Also consider that while you are getting a bargain price, you will be investing a lot on the backend. That cheap sticker price doesn’t make up for a roof repair, infestations, or other high cost issues. Be sure to pay for a complete home inspection and don’t commit if you don’t think you can take on the challenges of a foreclosure right now!