How to Purchase a Foreclosed Home
As the real estate market continues to be strong and home prices increase around the country, many buyers are looking to the option of purchasing a foreclosed property.
Aforeclosure happens when the homeowner no longer makes their mortgage payments and the lender seizes the property then sell the home to recover some of the loss. These homes are often sold below market value and the savings could mean the opportunity to own a home for buyers with a smaller budget or those hoping for more home than their current financial status qualifies.
Here are some things to know before purchasing a foreclosed home.
It Can Be a More Difficult Process
While the savings can be significant the purchase process for a foreclosed home can be more demanding than that of a regular home. The bank will not just want to give the home away or sell it at a steep discount unless there is the reason for it to be hard to sell. Many foreclosed homes sell for close to appraised value unless there are special circumstances. These special circumstances can mean that securing funding is going to be more difficult due to the risk you are taking on with a less than desirable situation.
How Can You Find a Foreclosed Home
Many buyers can search online for foreclosed homes, ask for help finding them from an experienced local agent, or check out listings at the local courthouse in the city or county they wish to purchase a home. If you plan to purchase a home at auction be prepared to need a significant sum of cash on hand as the auctioneer will require a portion if not all of the home be paid for right at the end of the auction.
The Risks of Buying a Foreclosure
The more informed you are of the risks the better the success of buying a decent foreclosed home. The largest risk comes from purchasing a home at an auction without being allowed to view the inside. If you are allowed to look at the home and get to do an inspection most foreclosures are sold “as is” meaning no matter the repairs needed the bank will not be making them. A foreclosed home can have many surprise repairs, so if you are not ready for added repair costs it may not be a risk you want to take.
It is Always Best to Use an Experienced Agent
Before hiring an agent to help you find a foreclosed property it is a good idea to ask them their experience in helping former clients purchase the same types of property. The purchase of a foreclosure will take more experience in finding these types of properties, knowing the extra terminology of banks putting together the paperwork and negotiation terms, and experience in negotiating with reluctant bank personnel.
For more information on finding a home for sale in Columbus and surrounding areas please contact us any time. We are here to help you find a Columbus home that you love.
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