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Foreclosure Homes - Buying Foreclosed Real Estate

Many home buyers opt to purchase a foreclosed home because of the savings. Properties are foreclosed when a homeowner can no longer afford to make the mortgage payments. After three months of non-payment, the lending institution will reclaim the property, and resell it to another buyer at market value. Some foreclosed properties are in bad condition; however, if you can locate a foreclosed home in good or "move-in" condition, you have stumbled across a great deal. Here are a few tips on purchasing foreclosed real estate.

Carefully Consider the Pros and Cons before Buying Foreclosed Real Estate

The major advantage of foreclosed real estate is the dollar amount you save by purchasing the home at wholesale cost. On average, expect to save about 30% when buying a foreclosed property. This is perfect for investors looking for rental properties or first time home buyers.

Because most properties are in good condition, the home may only need minor cosmetic improvements. This may include a coat of paint, new carpet, etc. Prior to submitting a bid for a foreclosed property, it is important to have the home inspected. If the home requires extensive repairs, realistically assess whether you can

afford the additional expense.

Select a Real Estate Agent with Prior Knowledge of Foreclosed Properties

When purchasing a home, it is important to choose a good realtor. Furthermore, many banks prefer working with buyers that are represented by an agent. This proves that you are serious about buying the property. Additionally, if you are a new home buyer, an agent can guide you through the entire home buying process and help you secure financing. Agents can also check for liens against the property.

Conduct Your Own Research of Foreclosed Real Estate

Although an agent may have a list of foreclosed homes, it will speed up the process if you have a list of prospected homes. Thus, you should obtain a listing of homes in your area. To do so, consider subscribing to an online service that offers up-to-date foreclosed listings. Furthermore, government agencies may have a selection of available homes. Also, research public records. Before a lender or bank can foreclose a property, they must file a notice with the country clerk.

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View our recommended list of foreclos ed homes online.
Written By: Carrie Reeder

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