According to property talk, the best possible way to buy a foreclosed home is to approach a broker, when you find an agent or broker, your goal of finding a foreclosed home can be easily realized and your search becomes easier.
Even banks do hire some real estate brokers to handle their properties in the real estate market, hence you may want to consider a broker ahead of an estate agent if you want to buy a home that has undergone foreclosure.
For more tips on buying a foreclosed home, you can read more checkintocash.com.
Tips on buying a home that is in foreclosure
There are basically 5 steps you should follow if you want to buy a foreclosed house;
- Find a broker or agent that specializes in foreclosure.
- Get yourself pre-approved for mortgage,
- Be aware of the duration it takes to sell a house within your price range.
- Study the sales prices of the house prices within the area you hope to buy from.
- Remember to do all paper works.
Tip #1: Find a realty broker as well as a lender
According to Property talk, these are the first two steps you must take when buying a foreclosure home and they must happen simultaneously. You need to ensure that you find a broker that works directly with the banks especially those banks that own the foreclosed houses.
Once you have a broker, simply get pre-approval from a lender. Professional real estate investors recommend that first time shoppers for homes must visit websites and databases of foreclosed homes. You may consider local real estate websites and filter your search criteria by putting “foreclosures”. You can also search for “Real Estate Owned” also known as REO, which are foreclosed homes that are being sold by lenders.
Tip #2: Make sure your real estate broker is on your side
Most realtors do have a long-term relationship with banks, and they are aware of foreclosed home listings that are not out yet. Make sure you call the broker about a listing you are interested in and ask them about upcoming listings that may take few days before they come up.
Sometimes, agents may become over-loaded especially when there are thousands of foreclosed homes on listings, hence it is better to contact them early if you want their attention. Meet the lender immediately after you have met with the agent.
Tip #3: Get your pre-approval letter
You may not need pre-approval letter if you are paying cash for the foreclosed home. If you are not paying cash, you will need a pre-approval letter from a lender, and this letter will describe how much money you are eligible to borrow, based on the assessment carried out on your credit score as well as your income.
According to experts in real estate business, most people want to find the foreclosed homes first and then think they can easily work out finances but the problem is, there are better deals on bank-owned foreclosed homes and the deals go quickly. According to Property talk, most first-time home buyers think that banks selling foreclosed homes will also finance the mortgage as part of the deal, you must never make the mistake of getting finance from the same bank that foreclosed a home. You can shop for the best-foreclosed home mortgage deal at check into cash.
Tip #4: pricing of foreclosed home will always depend on sales pace
Banks don’t really have a bottom line on price, you just have to consider the recent sales prices especially those on comparable properties. Make sure you write a competitive order based on today’s current property prices. Often times bank prices on the foreclosed home are quite low, and such homes will have competitive offers within few hours and when the prices are high, you can just come in at slightly lower rate.
Tip #5: Never expect a repair discount
You should keep in mind that foreclosed homes are usually sold as they are, hence you don’t expect discounts as compensation for repairs. If a foreclosed home has a price tag of $200000, don’t expect a 10% discount because you still have to repaint or fix some other little stuff.
You need to find how comparable homes are selling before you price the home. Depending on the market conditions at a particular time, there may be more modest homes sitting in a market that you probably don’t know of.
Experts suggest that you come at your highest price bid if the houses within your preference and specifications are selling fast. If you can afford few thousands of dollars on your bid, then you should probably spend it if there is a high probability that you may lose out on a preferred home.
When looking for a foreclosed home to purchase, experts also suggest that you try and locate trades-people as soon as possible. These are people who can access a home and give you the costs of damages that will be repaired especially damages caused by molds, pests, and leakages.
Likewise, they can also give you estimate on costs of repairing air conditioning and heating appliances.