As homebuyers look for deals in these 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?
Foreclosed homes are everywhere. If you live in a place where housing prices are higher, you might consider searching in a nearby area where the home prices are lower. Since it may be a few hours' drive for you, consider asking for a referral to an agent in that area who can help you navigate his/her local market and find foreclosures at a great price. If you're looking to stay close to home, a local agent can help you, or you can sometimes find foreclosures (and pre-foreclosures) on the internet.
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 pretty simple to find homes that are back on the market and owned by the bank, also known as REO (real-estate owned). You can inspect these homes before you purchase, which is key since foreclosed homes are generally sold “as is” and can need many repairs. You can mortgage your purchase, but be sure the condition of the house will be acceptable to the lender you are working with. Also, it's possible the seller may only want to work with cash buyers, but that doesn't happen very often.
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!
Need help navigating the REO and/or short sale market? Give us a call at 888-61-TRIAD! We're happy to help you!