Buying a Foreclosure: 3 Things You MUST Do Before Signing on the Dotted Line

Published by julia | Filed under Buyer / Seller Tips, Cities, Listings, Miscellaneous, Real Estate, Shout Outs, Uncategorized

It’s no secret–the economy is in the dumps. The banks that have over-exposed themselves to financial losses due to sub-prime lending are now increasing adjustable rate mortgages, pushing many homeowners into housing payments they can no longer afford. This is leading to an increase in foreclosures, and severely depressing what was once a very strong and thriving housing market.

In fact, the current foreclosure crisis means that there are more abandoned homes than ever. Sometimes, it’s because a foreclosure is in process and the homeowner just left. Other times it’s because a home was foreclosed and reverted to ownership of the bank, and the bank has been unable to sell it. While it may not seem like a good time to buy a house, what with the rampant foreclosures going on, it’s actually one of the best times possible to do so. This is because homes that have been or are about to be foreclosed on can offer some very good deals to those seeking to buy.

Foreclosed homes can be in good, bad, or even atrocious condition. The state of the home will make a big difference in the price the bank is asking for it. It’s not unheard of for some very distressed foreclosed homes to be sold for less than $10,000, or even less than $1,000. This can mean good news for you if you’re looking to buy and want a bargain, especially if you’re willing to do the necessary repairs to make the home habitable again.

If you’re considering buying a foreclosed home, here are some of the top things you need to consider:

1.  Do a thorough check of the neighborhood. You don’t want to get the deal of a lifetime only to find out it’s in a crime-ridden area that has little hope of appreciating in value in the foreseeable future.

2.  Check similar homes on the market to see what prices are being asked for them. You want to make sure the price the bank is asking is competitive with similar homes in comparable condition in the area.

3.  Get a real estate attorney to assist you during the buying process. An attorney will be able ot alert you to any potential legal problems you may inherit from the foreclosure if you buy the property. Look into all 3 of these things thoroughly, and you just might find yourself with the house of your dreams at a price you can sing about!