Buying a foreclosed home means you are purchasing a house someone can`t afford to pay for any more. When about foreclosures, you might encounter difficulties, but if you learn some useful tips about how to buy a foreclosed home, the process becomes easier.
Foreclosure refers to the situation when a home owner is unable to pay the mortgage, so the lender takes back the property and has the right to sell it again. Each state has its own legal steps regarding foreclosure, so do a little research and learn more about the legal process.
One of the best advantages of buying a foreclosed home is that you can get a significant discount, up to 30 percent or more. This happens because the lenders want to recuperate as much of their investment as soon as possible.
It is recommended to find an agent specialized in foreclosures, because some sellers accept offers only from represented buyers.
You can find foreclosure listings in real estate magazines, Internet search engines, newsletters and newspapers. Don`t hesitate to call lenders for real estate owned (REO) properties lists of foreclosed home.
There are government agencies such as Fannie Mae and the Department of Housing and Urban Development that offer foreclosed home listings. Each lender must send a notice of default in the local county clerk`s office, so also check public records.
Visit the house and inspect it very carefully. While some foreclosures are in good shape, others may require maintenance.
Ask you agent to verify comparable house to find out if the asking price for the foreclosed home is really underestimated.
Check your credit report and update your information. You can be required to get prequalified for a mortgage, but it depends on the agency in charge with the sale. Once you have found out if there is a listing broker, make an offer.
Make sure you know if the foreclosed home has liens on it and who is liable for those payments. When buying a foreclosed home, you should be ready to deal with more paperwork that in the case of a regular purchase, especially when the lender is a government agency.