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Money Saving Tips :: Buying a Home in Foreclosure
Buying a Home in Foreclosure: Buying a Home in the Foreclosure Process
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While buying a home in foreclosure doesn't always mean you'll get a home for bargain basement prices, buyers can often negotiate for a property at rates that are an average 20 percent below the home's market value.
With the recent downturn in the national housing market, foreclosures are at an all-time high, meaning there are a number of bargains to be found. However, before you start, keep reading for 5 great tips on how to buy a foreclosed home.
Step 1 – Finding Foreclosure Properties
With online MLS and real estate agent listings, it's even easier to find foreclosure listings. Services like foreclosure.com (http://foreclosure.com) and RealtyTrace even offer subscription services for about $50 a month that allow you to get ongoing updates on thousands of properties.
The best bargains for buying a home in foreclosure are areas that have a high concentration of foreclosed properties. However, that also means that reselling your property could be difficult. You may find yourself having to sit on the property, at least until the home values recover.
Step 2 – Stay Away from Foreclosure Auctions
When you purchase a home at a court foreclosure auction, you're buying it sight unseen and without the benefit of a full home inspection. That means you could be walking into a nightmare purchase that could cost you thousands in repairs and possible back taxes.
The best way to go about buying a home in foreclosure is to wait until the bank lists a property, meaning it is REO (real estate owned). This status makes the home eligible for financing and also that the home has been brought up to respectable standards.
Step 3 – Research Neighborhoods and Home Values
Before you snatch up the first foreclosure property you see, make sure that you actually are getting a bargain. Buy in a good neighborhood with increasing home values and for a price that is less than the current, surrounding home values.
Step 4 – Get Your Financing First
A number of lenders won't offer financing on distressed properties, which is the term often used to describe foreclosed homes. And, given how important speed is when buying a home in foreclosure, you're better off obtaining your financing ahead of time.
Step 5 – Have the Home Inspected
When people have their homes foreclosed on them, it's often happened because they're in a poor financial situation. That situation could mean they didn't have the funds to properly maintain their home, keep up repairs or a regular cleaning schedule.
So, before you jump into buying a home in foreclosure, always make sure you invest in a full home inspection.
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HomePropertyTips.com :: Buying a Home in Foreclosure