704-608-4560 call or text for more information
    Flint Foley Real Estate
    • Connect with Flint
      • About
    • SELL
    • BUY
      • GET PRE-APPROVED!
      • LISTINGS
    • RENT
    • Invest
    • Resources
      • Blog
      • Financial Tips
      • Tools & Calculators
    • My Clients & Partners
      • Reviews
      • I Recommend...
      • Featured Business

    Flint Foley Real Estate Blog

    Top 10 Tips to Buying Foreclosure Properties

    5/15/2018

    2 Comments

     
    Many potential home buyers believe that buying a foreclosed home is easy and inexpensive. While these homes are traditionally cheaper, some specific steps should be taken when purchasing a foreclosed home.

    1. Budget for the Unseen
    While the house may have a low price tag, the purchase price is not necessarily the only cost; repairs will also probably be needed. Some repairs may prove to be minimal, such as replacing a doorknob or patching up holes in the drywall. Other repairs, such as plumbing and electrical reconstruction, probably require professionals and a small investment.

    2. Take Your Time and Look Over the House Closely
    When buying a foreclosure, see the property yourself; do not rely on pictures. While you are looking at the house, take your time and examine the house thoroughly. No matter how much the home is reduced due to its foreclosure status, a house is still a major purchase that warrants careful inspection.

    3. Do Careful Research
    Find out how long the house has been on the market. This information will help you budget for those necessary, unforeseen repairs. The longer the house sits on the market, the less likely it has been properly cared for.
    For example, if the toilets are not in use, sewer gases could back up, or vermin may have infested the area due to untended lawns.

    4. Hire a Home Inspector
    More likely than not, a home inspection fee will come out of your pocket. While inspections also fall under the category of housing expenditures that are not part of the home’s purchase price, this expense is foolish to forego when buying a foreclosed home.
    Careful, thorough home inspections can show you what your untrained eye cannot. For example, you may not know that you are purchasing a home with no insulation. The inspection will reveal the absence and you can then calculate home improvement costs.

    5. Know the Value of the Home
    Find out the appraised value of the home. Typically, the amount a foreclosed home is listed for is the amount left on the unpaid mortgage. While this initially sounds like a good deal, situations exist in which the amount remaining is higher than the value of the house.

    6. Do Not Put All of Your Savings Toward a Down Payment
    Know what you can comfortably afford, so that you do not end up in foreclosure as well. Rather than putting all of your money into the down payment, you can use that extra cash as part of the repair or replacement process later.

    7. Bid Low on the House
    The whole point of buying a foreclosed home is to save money, so when you are bidding on the house, start low. When purchasing traditional homes, low bidding can sometimes lead to offended owners. In a foreclosure, however, the other party is a bank or other financial institution.

    8. Be Aware of Waiting Periods
    When a home is sold as a foreclosure, significant legal paperwork needs completing. For example, the previous owners may need to relinquish all rights to the property before you sign any final sale document. It is not uncommon for parties buying the home to wait months before being able to take possession of the property.

    9. Check Out the Neighborhood
    The neighborhood in which the house is located is as important as its condition. Whether you are planning to live in the property yourself, rent out the property, or resell the property after you have remodeled it, location is crucial.
    In some areas, neighbors are quiet and keep to themselves. Some neighborhoods have little crime and vandalism, while other locations have daily vandalism or other problems. Purchasing in such an area could leave you frustrated with continuous repairs you may have to make to the home.

    10. Hold Your Ground
    When a bank sells a home, it wants to recoup the mortgage amount not being collected. As long as the bank receives that dollar amount, the bank is happy. Some sellers in a foreclosure are anxious to close and would do just about anything to sell you the house.

    You can be picky, and you should not have to settle for anything less than what you want.

    Source
    2 Comments
    Joy Butler link
    6/19/2018 01:29:50 pm

    I am so thankful for what you have shared about buying foreclosure properties. I found it interesting when you said that location is crucial, so we really better check it out. My twin brother is currently looking for a house to buy. Maybe I could suggest to him to consider buying a foreclosed property but need to ensure that the location is okay as well as the neighborhood.

    Reply
    Michelle Catapang link
    1/19/2021 10:39:45 pm

    Thanks for sharing this content and information.

    Reply



    Leave a Reply.

      Archives

      January 2020
      July 2018
      June 2018
      May 2018
      April 2018
      March 2018
      February 2018
      January 2018
      December 2017
      November 2017
      October 2017
      September 2017
      August 2017
      July 2017
      June 2017
      May 2017
      April 2017
      March 2017
      February 2017
      January 2017
      December 2016
      November 2016
      October 2016
      September 2016
      August 2016
      July 2016
      June 2016
      April 2016
      February 2016
      November 2015
      October 2015
      September 2015
      August 2015
      July 2015
      June 2015

    Picture

    Resources

    • About
    • Blog
    • Tools
    • Reviews

    Contact Me

    704-608-4560

    [email protected]

    Flint Foley Real Estate & Investment Services | Real Estate Agent Charlotte NC 

    Back to top