Have you fallen in love with a home only to find out that it’s in foreclosure? Or are you looking to purchase a home at a lower price in order to fix it up and possibly resell it? Purchasing a foreclosure is different than the process for a traditional home. If you are looking to buy a home that is in foreclosure here are some tips to help you through the process.
5 Tips for Buying a Foreclosure:
What constitutes a foreclosed home?
What constitutes a foreclosed home is that the title has been taken back by a lender, homeowner’s association or possibly a tax lien sale, and they are all different and have different regulations on transfer of title. One major difference in a foreclosed home is that there is no room for negotiation. A foreclosed home is one that is bank owned and typically vacant. Normally the home comes as is and any repairs, problems or upgrades are up to the buyer. A foreclosed home has only one real estate agent involved with the sale. You will also need a preapproval letter from a reputable lender before your offer could be accepted.
Find a Lender and a Real Estate Agent
You must have an agent that will deal directly with the bank who owns the home. You also need pre-approval because all banks that deal and foreclosures require mortgage pre-approval before they will accept your offer. Having an experienced agent will take you a long way when trying to buy foreclosed home. Many banks hire real estate agents to specifically sell their foreclosures. This will allow you to work directly with the banks broker and their commission maybe less. A broker who is experienced in the foreclosure process will give you a leg up when trying to buy a foreclosed home and dealing with lenders.
A physical pre-approval letter will be necessary when making an offer on a foreclosure. Many bank owned properties can go quickly because they are at a discounted price and having the preapproval letter can help you get the deal.
Foreclosed homes are most likely sold in “as is” condition. This means that you cannot make any negotiations due to home repairs or issues. Your agent at TBRAIG along with your lender can help you to determine an estimated cost for repairs in many cases. This will help you make the best decision for you prior to purchasing a property as well as staying within your budget.
Make an Offer
When it is time to make the offer you may not be sure what price to set. Looking at comparable homes may help you. However depending on the condition of the home and market conditions deciding on an offer price could be more difficult. The best advice is to offer a reasonable amount without going too low and without too many concessions. Depending on the area there could be multiple offers on the home. If you really want the home then you should come in at the highest amount you are willing to pay.
When you are interested in purchasing a foreclosed home you will need to have some patience. Since the home is bank owned, a reply on your offer could take weeks. Foreclosures, unlike a traditional home sale, where realtors can quickly go back-and-forth during negotiations, it may take a while to reply depending on a few factors: the number of foreclosed homes they have, and how many offers are on the particular home, to name a few. However, if the home is worth it then your patience could pay off.
When you are interested in a foreclosed home you need to know that it is unlike a traditional home sale in many ways. Don’t let that deter you, just be sure that you understand the process. Your patience could pay off and you could end up getting your dream home. At Tampa Bay Realty and Investment Group, we are experienced in foreclosed home sales. Contact us today to get started on your search for the perfect home. We will help you navigate all the uncertainties you may have.