Buying a foreclosure can save you a lot of money on a home. These homes are sold at a discounted rate, because the previous owner could not pay their mortgage, in turn causing the government and or lender to take possession of the home. Most experts have said it can be a very difficult process to go through if not done carefully. If you are in the market for a foreclosure, it is probably because you want to save some money but if you don’t purchase it wisely you can end up costing yourself more money in the end.
The first and probably most important thing you want to do is hire a licensed Real Estate agent to help you search for your foreclosed home. You want to consider someone who is experienced with selling foreclosures. They will assist you in finding a neighborhood that has a saturated foreclosure market. They will work with you to find the best neighborhood and home for your needs.
Remember just because a house is cheap; don’t make any decisions until you have done extensive research on the neighborhood and the home itself. Make sure the home doesn’t have any major defects that are known, and make sure it is in a good neighborhood.
Once you and your agent find the home of your choice, you will then proceed with the Auction if that’s the route you decide to take. This is where the real deals and good prices come in. However, you only have the option of paying cash, and you do not have the option to inspect the home. In most cases foreclosed homes are a mess. That’s why they are an investors dream. They can buy them for cheap, fix them up and then flip it. Unless you are in a position to fix the home if needed, you might want to rethink purchasing a foreclosed home through an auction.
If the home doesn’t sell at the auction, the lender who gave the loan will then take possession of the home. In most cases they will list the home with the Broker, which can be beneficial to you with your purchase. My advice would to be to search for properties that did not sell at the auction, that way you can get a home inspection of the home prior to purchasing it. It will not be hard to find foreclosures in this market, because as you all know the market is flooded with them. You also do not have to pay cash to purchase the home. Keep in mind that you are not going to get it for as cheap as you would at the auction, but you could save yourself hundreds, even thousands of dollars in repairs because you will be aware of anything that is wrong with the house.
Just always remember to be cautious when buying a foreclosed home. Don’t jump into anything just because it seems like a good deal and if at any time through the transaction you feel uneasy, just consult your agent. They are always there to help you with all of your Real Estate needs.