5 Tips to Buying a Foreclosure

By
Real Estate Agent with DWELL Real Estate

hinking of buying a foreclosure?

Well, if you are you looking to buy a home you might as well look at the bank owned properties for sale. There are plenty of bargains out there to be had on foreclosed properties. Here are 5 tips to buying a foreclosure.

1) Educate yourself on the market

This really goes for just buying in general. It is important to be knowledgeable about the market, neighborhoods, recent sales etc. Find yourself a good Realtor who knows the market. They can help you by sending information on sold properties and other market statistics. Just because a property is owned by a bank doesn’t mean you should buy it. If you buy in an area that’s losing jobs and is riddled with crime, home values are likely to take a lot longer to recover.

2) Get financing first

This is crucial. Lending guidelines have changed over the years. It is harder to get money to buy a home. It may even be harder to finance a bank owned property depending on the neighborhood, condition of home and current market conditions. Make sure you are pre-approved for a mortgage so you are not wasting your time.

3) Finding a foreclosure

You can sign up on various foreclosure websites like Realtytrac.com or Foreclosure.com. There is a charge to be a member of those sites. Most bank owned properties are listed on the MLS so if you are working with a Realtor they can help you find foreclosures as well. It is good to have a Realtor so you can also look at homes being sold by private sellers as well. Sometimes those are the best deals.

4) Get Inspections

When people have trouble paying their bills often times they don’t maintain there home like they should. Don’t assume the bank knows much about the condition of the home. If you are under contract on a foreclosure make sure you get inspections done. It is best to know what is wrong with the home before you buy it. It may seem like a lot of money to hire inspectors but that money could be a drop in the bucket compared to the money you have to spend to fix something.

5) Hire an attorney

When you are under contract on a foreclosure make sure you hire an attorney to represent you in the closing. It is just good to have someone on your side reviewing the closing documents. Don’t assume the bank is going to always do the right thing. The expense could be well worth the money.

 

Comments (2)

Roy Kelley
Realty Group Referrals - Gaithersburg, MD

We find that RealtyTrac is not a reliable source for home buyers. Too much inaccurate information and it is not updated. Buyers should use a local agent that has the market knowledge and the lists of available properties.

Oct 09, 2009 12:17 AM
Klaus Nicholson
ROSE ANNE ERICKSON REALTY, LLC. Columbus Ga, Ft Benning, - Columbus, GA
Realtor, Columbus Ga Homes, Fort Benning Homes

Marc Rasmussen - Sarasota FL Real Estate, Sarasota, FL

Hello Marc,  Stick with a Realtor, I am in total agreement with Roy Kelley (RE/MAX Realty Group). I have found RealtyTrac to be way off track. There are HUD and Va foreclosure lists for free.  I wouldn't suggest zestimates either.  There are plenty of great deals available.  All realtors should get in the habit of buying a property or two every year.  Rent it or Flip it, just make informed decisions that won't hurt your financial cushion.  We all know it will pay off in the long run.

 

Realtor, Columbus Ga Homes

Oct 09, 2009 03:55 AM