How to Buy a Foreclosed Home
Buying a foreclosed home looks a little different from a traditional home sale. While foreclosed homes can offer good value and strong returns, they also come with a nuanced bidding process and the potential for extensive repairs. So, if you’re considering making an offer on a foreclosed home, we’re here to tell you what you can expect from this unique real estate route.
At Mark Spain Real Estate, we’re here to help you achieve your real estate goals. If you’re interested in buying a foreclosed home, our tenured experts will help you navigate the unique circumstances for foreclosure sales. Below, we share some top tips for buying a foreclosed home. Check it out!
How to Buy a Foreclosed Home
Hire a Real Estate Agent
The first step in buying a foreclosed home is always to hire a real estate agent. Because a foreclosure sale is a bit more complicated than a traditional listing, a real estate agent will be very beneficial in helping you navigate the process. When hiring an agent, you’ll want to choose someone specializing in foreclosure sales. This way, they can provide valuable insight into the foreclosure purchasing process, such as explaining the different types of foreclosure sales and where to find these listings. Your real estate agent will break down the following information:
Types of Foreclosure Sales
A real estate agent who specializes in foreclosure sales will explain the different types of sales you can pursue, such as:
- Preforeclosures: Buyer purchases the property before the home goes under foreclosure.
- Short sales: Buyer purchases a property for less than what the seller owes on the mortgage. Bank can forgive some debt.
- Public auctions: Buyer bids in a public auction to make an offer on foreclosed property.
- Bank-owned homes: Buyer purchases a foreclosed property legally owned by the lender, their real estate-owned inventory.
How to Find Foreclosure Sales
A real estate agent will help you locate foreclosed homes, as these properties typically won’t be advertised like traditional listings. They will likely recommend using the following resources:
- Department of Housing and Urban Development: The HUD is an official government website listing foreclosed properties.
- Fannie Mae HomePath: An MLS where you can search for foreclosure listing by address, ZIP code, or MLS number.
Get Mortgage Preapproval
Like you would for a traditional listing, getting mortgage preapproval is essential for purchasing a foreclosed home. Often, foreclosed homes are scooped off the market by real estate investors with cash offers. For you, a traditional buyer, this means you’ll need to do whatever you can to show you’re serious about closing a deal. Having mortgage preapproval exhibits your intention to make a purchase and your affordability. This will make you appear more serious to sellers and increase your chances of getting an offer acceptance.
Get a Home Inspection and Appraisal
The home inspection and appraisal process is a common obstacle in a foreclosure sale. Because foreclosed homes are usually sold “as-is,” they often require a lot of repairs and renovations. If you plan to make an offer on a foreclosed home, you’ll 100% need a home inspection before finalizing the sale. Doing so might affect your offer, as you might choose to bid less to make room for repairs after closing. If you can’t get a home appraisal or inspection before your purchase, only go through with the deal if you are savvy with repairs or have a fruitful budget for hiring professionals.
Make an Offer
Your home inspection and appraisal reports will help you make informed decisions on your offer. Along with these reports, your real estate agent might also advise using a comparative market analysis to determine a solid offer. Keep in mind that foreclosures are typically already listed at a discounted price. These lower prices can generate fruitful competition, meaning you might need to up your offer to be considered.
Sell or Buy a Home with Mark Spain Real Estate
Need help meeting your real estate goals? We’re here to be your right hand! With decades of valuable industry experience, the professionals at Mark Spain Real Estate offer exclusive insight into the local market. When you work with us, expect unparalleled customer satisfaction from start to finish!
Check out our Guaranteed Offer Program! Our guaranteed offer participants receive the most competitive all-cash offers in the industry and close in as little as 21 days. Contact our agents today to learn more about our Guaranteed Offer Program and sell your home hassle-free!
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