If you’ve made the decision to buy a foreclosed home, you could find yourself an unbelievable bargain. However; you could also be buying into a nightmare. Understand all that is involved and how best to prepare yourself for the process with the following tips.
1. Get pre-qualified before you begin. Review copies of your credit report to ensure accuracy, and speak to your lender about your qualifications. Have him recommend specific limits he expects you to have, and plan your budget around those figures. Being pre-qualified will give you much more leverage in the buying process, and knowing what you are prepared to get yourself into will make the process smoother and faster.
2. Find an experienced agent. Not every Realtor has expertize with foreclosures, but find one who does is very important to your interests. Look for one in the particular area you are interested in, and don’t be afraid to ask them for references. Search online for any other relevant information you can find before placing your absolute trust in them.
3. Expect to see homes in stark conditions. Foreclosed homes can go months if not years without being lived in or worked on. This means they may not be clean or even functional. Be prepared for anything including broken down doors and other hazards. Avoid going to look at foreclosed home in your Sunday best and make sure your shoes are comfortable and can safely traverse any surface.
4. Calculate what you can afford in repairs. You may plan to spread out the renovation of the home over a period of months or more, but it’s important to have a specific total in mind before you buy. You’d be wise to avoid buying something that will keep taking money from you in the form of repairs and maintenance, no matter how affordable it seems when broken-up over time. Think too about living in the home as it’s being fixed up and who will be working on it.
5. Don’t expect a personal experience. Even if you’ve got an agent with you, there will most likely not be anyone answering the door with coffee and a smile. Foreclosed homes are mere figures on paper to the bank, and they limit the amount they spend on them. In order to discover any history on the previous owner, you will have to search town hall records for permits and other filings, but unless your agent can find disclosures, you’re not likely to learn much.
6. Hire your own inspector before making a commitment. As much as you may discover on your own or with the help of a Realtor, nothing will prepare you for purchasing the home more than a hands-on inspection by someone you are paying for. There should be no conflict of interest, so avoid using the bank’s inspector or just taking their word on things. Have your own man go into the structure and examine it thoroughly; after all your investigation, he may find additional problems that are real deal changers!
Go into the process of buying a foreclosed home with your eyes wide-open. Although it’s known for yielding outstanding savings for buyers, it can also hit you with a few surprises if you’re not careful.