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For those in the market for a new home, the prospect of buying a foreclosed home can be more than a little bit daunting. You will likely have seen some of the horror stories on TV of homes with termites or undisclosed liens. However, with a little preparation and care, a foreclosed house could be the perfect new home for your family. These five steps are a great place to start:
1) Get pre-approved on a mortgage
Step one is pretty much exactly the same as it would be if you were buying a regularly sold home. Speak with your financial institution to find out how much you can borrow, and at what rate. This will help you budget later. Being pre-approved on a mortgage will also show realtors and sellers that you are a serious buyer.
2) Find a realtor or broker that specializes in foreclosures
Particularly if you are a first-time foreclosure buyer, it can be well worth finding a realtor who is experienced in buying foreclosed properties. They will be able to help you solve any problems that arise, and may even save you money in the long-run.
3) Bid on the home you want
Whether you are bidding at an auction or directly with the seller, actually buying the home will likely be your next step. Be sure to leave room in your budget for important things like inspections, taxes, closing costs, and insurance.
4) Have a thorough inspection completed and resolve any liens on the home
This step is probably the most important part of your transaction. Once your offer on the home in accepted, you will have some time to complete all of the inspections and other tasks that you deem necessary. If you find anything that worries you, such as extensive termite damage, or large unresolved liens, you will be free to pull out of the purchase at any time.
Now comes the fun part. Repair and finish off the home in a way that works for you and your family. Once that is all finished, it is time to move in and enjoy your new home.
Though the prospect of buying a foreclosed home can be a bit scary, if you are able to follow these five steps you should avoid running into any serious issues.