5 Steps To Buying A Foreclosed Home

5 Steps To Buying A Foreclosed Home


buying a foreclosed home

Foreclosure is a situation in which a homeowner is unable to make mortgage payments as required, which allows the lender to seize the property, evict the homeowner and sell the home, as stipulated in the mortgage contract. When you see a home listed as “foreclosed,” it means that it’s owned by the bank. Every mortgage contract has a “lien” on a property. A lien allows the bank to take control of the property if the homeowner stops making mortgage payments.

Buying a foreclosed home is a little different than buying a standard property owned by a homeowner. Most foreclosures are sold as-is, which means that you can’t negotiate with the bank to make repairs for you.

Here are 5 steps in buying a foreclosed home:

Step 1: Determine Who You’ll Purchase The Property Through.
There are three ways to buy a home in foreclosure: from the homeowner, from the bank or at an auction.  Purchase From A Homeowner or Short Sale; Purchase from A Bank; Purchase at Auction.

Step 2: Work With A Real Estate Agent To Facilitate The Purchase.
Most banks hand foreclosed properties off to a real estate owned (REO) agent who works with standard real estate agents to find a buyer.  Not every real estate agent has experience working with REO agents. An experienced foreclosure agent can help you navigate your state’s REO buying process, negotiate your price, order an inspection and make an offer. Research real estate agents in your area and look for an agent who specializes in foreclosure sales.

Step 3: Get Approved For A Mortgage To Finance Your Purchase.
Unless you buy a home at a foreclosure auction, you’ll probably obtain a mortgage to fund your home purchase. Once you’ve found an agent and you get started looking at homes, you’ll want to get preapproved for a loan. A preapproval lets you know how much you can get in a home loan. Choose a lender and apply for a mortgage preapproval to narrow your search.

Step 4: Conduct An Appraisal And Inspection On The Property.
Inspections and appraisals are both crucial when it comes to buying a foreclosure. An appraisal is a lender requirement that lets you know how much money a property is worth. Lenders require appraisals before they offer home loans because they need to know that they aren’t lending you too much money.

Step 5: Purchase Your New Home
Read your inspection and appraisal results and decide if the home in question is really right for you and whether you’re okay with buying a home as-is. Contact your mortgage lender to finalize your loan if you have the money or skills to make any needed renovations. Your real estate agent will help you submit your offer and prepare you for closing.

A foreclosure is a home that’s under the control of a bank. People foreclose on their homes when they can no longer make their payments. In most cases, foreclosed homes are much cheaper than other homes in the area, and you can sometimes find a good deal. However, these homes also often have severe damage and structural issues and are usually sold as-is.

If you need to know more info on buying a foreclosed home, you may call us at 216-619-4387, or visit www.cpdhomes.com, we will be more than happy to assist you!

Top 10 ‘FAST Home Selling’ Secrets  You Should Know!

Top 10 ‘FAST Home Selling’ Secrets You Should Know!

Before you get into the world of real estate property selling, you must read this fast home selling secrets every...
Read More
25 Best Things To Do When In Cleveland

25 Best Things To Do When In Cleveland

Lover of art museums and culture?  Cleveland has you covered at the Cleveland Museum of Art. More interested in the...
Read More
5 Ways Moving To Cleveland Could Improve Your Life

5 Ways Moving To Cleveland Could Improve Your Life

Cleveland is a diverse community, a true melting pot nestled on the shores of Lake Erie. You don’t have to...
Read More
Reasons Why Dealing With An Investor  Is The Best Option To Sell Your Home Fast!

Reasons Why Dealing With An Investor Is The Best Option To Sell Your Home Fast!

Selling a house is not always that easy, especially if it is your first time. The traditional route of selling...
Read More
Moving Home For A Better Millennial Life? These Seven (7) Reasons Will Make Your Move To Cleveland!

Moving Home For A Better Millennial Life? These Seven (7) Reasons Will Make Your Move To Cleveland!

Are you a Millennial looking for a place to settle down?  Look no further than moving to Cleveland!   Cleveland, Ohio...
Read More
Top 4 Benefits of Turnkey Real Estate Investing

Top 4 Benefits of Turnkey Real Estate Investing

Many savvy entrepreneurs believe that the best way to earn significant profits over time is by investing in real estate. ...
Read More
A Quick Look at Cleveland’s Real Estate Stats & Trends Amid 2021 Pandemic

A Quick Look at Cleveland’s Real Estate Stats & Trends Amid 2021 Pandemic

Cleveland is ranked as one of the top housing markets to watch in 2021 by Forbes. The affordability of single-family...
Read More
Tricks & Tips on House Flipping for Fast Home Selling!

Tricks & Tips on House Flipping for Fast Home Selling!

Basically, the term "house flipping" is used by real estate investors to describe the process of buying, rehabbing, and selling...
Read More
Top 6 Passive Income Sources from Real Estate Investment

Top 6 Passive Income Sources from Real Estate Investment

Passive Income is a form of income received on a regular basis with minimal effort on the investors part. Being...
Read More
Looking For The Best Real Estate Agent To Sell Your Home – FAST? Check Out These Guidelines!

Looking For The Best Real Estate Agent To Sell Your Home – FAST? Check Out These Guidelines!

Finding a realtor and choosing the right agent to sell your home fast is not as simple as you may...
Read More

Follow by Email
LinkedIn
Share
Youtube
Youtube
Twitter
Visit Us
Follow Me

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Top