Step By Step: Buying a Foreclosed Home
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Buying a foreclosed home can be a very intimidating process, but do not let that defer you from following through with doing it. Just be sure that you are going about it the right way, considering all avenues and knowing who to go to.
Now, there are two ways to approach buying a foreclosed home---auction and realtor.
If you choose the realtor route then obviously the first step in finding a foreclosed home is finding a realtor. It is highly recommended that you find a realtor who specializes in foreclosed homes. You want to make sure that whoever you are working with knows the banks, knows the market and knows all about foreclosed homes. This is not the typical home buying process, so it would behoove you to hire someone who specializes.
It is a good idea to find multiple realtors and reach out to all of them, asking for a list of foreclosed homes in your area, and see who brings you what. You want to be very specific, informing them that you have a desired price range and neighborhood(s).
When you do find a home, it is recommended that you go to the county clerk's office to get the title of the home. This way you will have all of the legal information on the home that you are looking at.
Now, if you choose to take the auction route--be cautious. Do your research, and attend an auction or two just to watch and see how it all works before you actually continue on to try and buy. Before you bid, you need to know what kind of budget you are working with and stick to it. Keep in mind any repairs that might need to be made on any given home as well and be sure to factor that into the budget. Furthermore, auctions are almost always cash only.
We would never recommend to buy a house sight unseen. You need to go look at the house, inspect it and be sure that any damages done will not be over your budget. Beyond that you should pay to get the home professionally and thoroughly inspected so that anything you might miss will be accounted for.
Consider the neighborhood that the home is in, the commute and all contributing factors like you would in any other home buying process. Once you decide on a home, be sure to look into any redemption laws that are applicable by state. The last thing you want to do is starting buying everything for your home just to have it taken away from the owner coming up with the payments. Be cautious if this applies to your state.
Be prepared to wait after you submit an offer. Since you are not really dealing with a homeowner, you are dealing with a a bank, it can take much longer that the typical home buying process.
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