Thinking about buying a foreclosure? Here are some tips

As home buyers look for deals in times of uncertainty, many are becoming aware of foreclosed homes and the benefits that come with purchasing one. If you are interested in buying a foreclosed home, here’s a few things you should know:

Where should I buy?

Places affected by the housing crisis likely will be your best bet to finding a good foreclosure. You can research this and, if you aren’t looking to move, you can find foreclosed homes in your area with a  quick search. Sometimes it’s hard to recognize if a property listing is a foreclosure and there are times when you acquire information that may not be correct.

A REALTOR® can help with finding the status as well as current information regarding the property.

How do I buy?

You can buy directly from the owner before they’re officially foreclosed on, or you can dive right in and try to compete with investors at an auction. It’s safer and easier to find homes that are owned by the bank, also known as REO (real-estate owned). You can inspect these homes before you purchase, which is key when foreclosed homes generally are sold “as Is” and can need repairs. You can mortgage your purchase.

You can be almost certain the property’s title is free of liens because the bank that owns it typically will perform a title search before listing the home for sale. It’s always best, however, to do your own research by searching the title, and verifying information.

What should I expect? 

While you can go solo, consider hiring an agent. Working with a real estate agent who specializes in foreclosures can be a huge timesaver. Keep in mind foreclosure purchases in general aren’t always quick, as there may be unexpected issues and road bumps.

Consider while you are getting a bargain price, you will be investing a lot on the back end. That cheap sticker price doesn’t make up for a roof repair, infestations, or other high cost issues. Be sure to pay for a complete home inspection and don’t commit if you don’t think you can take on the challenges of a foreclosure right now.

Always be prepared for the unknowns. With the lack of inventory in our current market, these properties are in demand so be prepared to make your best offer, with the best terms and with short time frames.