If you’re planning to buy a foreclosed home, the first thing you should know is that this will be different from your typical real estate purchase. Although you are generally going to get a better deal on a foreclosed property, you are also taking a larger risk. Many foreclosed homes are in poor condition. When you go into deals such as these, you agree to accept the home as it is. You will also typically be dealing directly with a bank. Depending on what type of foreclosure the property has undergone, it can be a long, grinding process.
Here is How You Buy a Foreclosed Home
- Get a specialized agent: Unlike a traditional home purchase, there is usually only one real estate agent involved. You will need to hire an agent who specializes in foreclosed homes to help you navigate through the difficult and unique process.
- You’ll need an approved mortgage upfront: In most cases you will need a letter that preapproves you for a mortgage upfront before you can buy a foreclose home. Be ready to get these approvals for homes you plan to make an offer on.
- Hire your own inspector: Remember, with nearly all foreclosure deals you are agreeing to buy the property as-is. You can minimize your risk by getting a professional evaluation of the home. We already wrote a post on how to hire a good home inspector. Making this important investment can save you from a lot of trouble later on.
- You might need to make lots of offers: The prices are great, but budget plenty of time to go through houses that do not end up foreclosing or are in too poor of condition. Additionally, the process of buying a foreclosed home can sometimes take longer than a typical home purchase. Sometimes you will go through unconventional processes such as auctions, where the unexpected is more likely to happen.
Knowing the basic steps and what to expect can make the process of buying a foreclosed home easier and less stressful. Sometimes it’s just a question of continually looking and making offers until you get that excellent deal you were looking for.
Garland & Mason, L.L.C. is a New Jersey real estate law firm that fights to help their clients achieve long-term success.