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Buying a Foreclosed Home
Here is a blog written by Mehgan Bahm about buying a foreclosed home.
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3 Replies
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Buying a foreclosed home on a non-owner occupied home home is very easy with hard money loans. Quick commitment, same day closing, and limited paper work. No income docs 70% loan to value
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Here is another blog about how to buy a foreclosed home by Paulyn
https://www.gustanchoassociates.com/how-to-buy-a-foreclosed-home/
gustanchoassociates.com
The best way how to buy a foreclosed home is to get your mortgage loan commitment with a tbd underwrite pre-approval or an FHA 203K loan.
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Getting hold of a property through foreclosure might not be as easy as it sounds, so professionals advise a stepwise approach to reaching the goal. Buying a home through foreclosure auction requires understanding how the process works. One such professional would be a real estate agent who can guide one through the process’s ins and outs and assist during the various phases.
Understanding the Types of Foreclosure in detail, along with the purchases involved:
- A home bought in an auction is done under the premise that it will be bought in its current state.
- To ensure that this is the case, the contractor cannot inspect the home or decide its value.
- Typically, this type of home is paid for in cash, and once the naked power is applied to it, there is no going back.
- Then, some homes were taken over by the bank, now known as Bank-Owned Properties.
- The bank took over these homes after foreclosure, now available for public purchase.
- These homes are typically available alongside an appraisal for inspection.
- Then, there are homes owned by individuals who want to sell their property before foreclosure.
- Selling the house at this stage is usually a hassle as exclusivity comes into play.
- You must deal with the owner directly.
- Many things can go wrong in the process.
- To avoid that, look for an agent familiar with and specializing in foreclosure.
Research and Prepare
Research Properties:
- Identify foreclosures through listings on the web, for example, Zillow, or through local listings.
- Bid in auctions so that you know how they proceed.
Get Pre-Approved:
- In case you want to finance the purchase, get a mortgage pre-approval to show sellers that you mean business and want to buy their property.
Inspect the Property
Property Inspection:
- If you are purchasing a property owned by a bank, get an inspection done to ascertain the property’s status and likely repair costs.
Estimate Repairs:
Since most foreclosures are purchased in “as is” condition, detail all repair estimates and add them to the costs you must cover.
Make an Offer
Bid at Auction: If going for the auction route, ensure you have the required amount ready to bid without a hitch.
Negotiate with the Bank: If buying bank-owned property through your agent, customize your bid around the property’s current status and anticipated market value.
Close the Deal
Finalize Financing: Obtain a loan and satisfy all payment requirements.
Complete Paperwork: Communicate regularly with your lawyer on the necessary documentation and the conclusion of the transaction.
Plan for Repairs and Renovations
Budget for Repairs: Put aside money for repairs or other structural improvements.
Hire Contractors: Where necessary, employ contractors for assistance in significant repair and refurbishment works.