11 Tips On How To Buy A Foreclosure Home
by Davion Wong
It is the dream of every young family to own a beautiful and spacious home. As most houses are not within the reach of these young families, buying a foreclosed home is an alternative that should be seriously considered. While it can prove to be a really good bargain for you (sometimes up to 40% off the original value of the house), you do need to know some tips to buy a foreclosed home.
There are 11 basic steps to buy a foreclosure home.
1. Be mentally prepared that the property was seized from the previous homeowner for defaulting on the mortgage payment. In other words, there are legal steps to be taken which would be different in each state.
2. Always do a preliminary valuation of the property. The lenders and banks are often more than happy to let go of the house at huge discounts. It can be 20 to 30% off the original value. Check out how much other houses in the neighborhood are sold for and you have a good gauge.
3. Get yourself an experienced foreclosure agent. In most cases, the sellers prefer to deal directly with the buyer’s representation.
4. Find out where foreclosure homes are offered through business listings in magazines and newspapers. Check out the websites of government agencies and property lenders for a published listing. You can contact the Department of Housing and Urban Development (HUD) and the local county’s office for information.
5. Physically inspect the home you are interested in. See if the environment and surroundings are suitable for you and your family. If you are buying the property as an investment, ask yourself if it is good as a rental home or for reselling.
6. Get your agent to find out what is the fair value for the place you are getting when you buy a foreclosed home. There is no point in going through the trouble of getting foreclosed properties if the discount is insignificant.
7. Confirm that your finances are sound and that you do not have a bad credit history. This is important as you would need a mortgage to buy the property.
8. Let your agent represent you in making an offer to the listing broker to buy a foreclosure home.
9. Verify if the foreclosed property is clear of its liens. These can include outstanding property taxes, utility and conservancy bills and so on. Check out who is liable for the payment.
10. Request the seller to grant a house inspection. This is where you engage a qualified person to carry out the inspection of the structural integrity and general details of the home. This bill is solely borne by you so do set it aside.
11. Buying a foreclosure home does involve a fair bit of paperwork. There is even more if you are dealing with the government and not private banks. Fortunately, your agent can assist you.
Okay, by now, you should know more about how to buy a foreclosure home. For a complete A – Z guide on how everyone else actually does it, visit my property blog and get your dream home now.