Tips On Buying A Home In Foreclosure

When buying a home in foreclosure, the first thing you should do is research. Search the property listings in the area or region you wish to purchase. You can motor to the County Courthouse of the area you are interested in and ask to look through the “Registry of Impending Foreclosure Sales.” You can also check out the Public Notices section in the local newspaper. Another choice for finding information about foreclosed properties is to go to the office of a nearby bank and ask for a list of their foreclosure properties. As well, you could subscribe to one of the many services on the internet who will be glad to provide you with an assortment of information for a membership fee.

Pre-foreclosure process
Once you choose a property from the list of available foreclosures that meet all your criteria, investigate the details further. A pre-foreclosure offers you an opportunity to get a good deal on the property before the full foreclosure takes effect. A better deal can often be found before the property has gone into “actual” foreclosure because a pre-foreclosure sale will benefit the homeowner and the lender by saving the costs of a full foreclosure.

Auction process
The next phase in the process could be the Sheriff's sale where the property is put up for public auction and sold to the highest bidder, if a bid is made at a reasonable price. When buying a home in foreclosure during the auction process, you will likely not be allowed to look inside your chosen property before the auction begins. Therefore, you need to do all you can to get the most information you can before you offer a bid. Take a look at the surrounding homes and their property values. Try to determine as best you can a rough estimated value from the number of rooms, baths, and square footage of the foreclosure property. You might be able to obtain a recent property tax assessment for the property. You can also talk to a local realtor about the property or go online to find a service that might offer a general house valuation.

Before the auction starts, be settled on the amount you are willing to bid and know what you can afford to pay monthly according to your financial situation. There is typically a 70-75 percent rule used that would represent a “good deal” on a foreclosed property. That is, 70-75 percent of a comparable home in the same neighborhood. Get pre-approved and pre-qualified for your home loan before the auction. Doing so will show you are a serious bidder, a strong contender, and could ensure you don’t lose your dream home due to a financing technicality.

If the auction ends without a winning bidder, it next goes to the real estate agent. Keep an eye on the property and talk to the agent about what the price will be set at and place your best offer.

Each phase of the foreclosure property offers an opportunity to find out more about the property and get a good bid entered. Buying a home in foreclosure is getting easier because there are more foreclosures available and banks want them off their books and lifted from their responsibility. Banks don’t want to be homeowners; therefore, they will work with a buyer as much as they possibly can to get a property sold.

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