Foreclosed properties are often offered at bargain prices. However, the process of purchasing a foreclosed home can be complicated, as it may require working with lending companies, government offices and/or current occupants.
This may be daunting, especially for first-time homebuyers. However, if you approach the process with a clear plan of attack, you may be able to find a great home at a low price. Here are four steps to buying a foreclosed property.
- Pre-qualify for a mortgage and work with a real estate agent
A professional real estate agent can help guide you through the process. In addition to organizing paperwork, real estate agents can help you view other foreclosure properties and consider additional options. Your agent will want to know how much house you can afford before you look at properties. Contact a trusted lender who can pre-qualify you for a loan and estimate the price range of the homes you should be considering.
- Search for a property within your price range
It is important to consider the total cost of a house before deciding to move forward. You should conduct a wide search of properties in your preferred area to gauge what size home you can afford, which features you want and the condition of the property. Some homes boast large amounts of space and updated amenities, but have fallen into disrepair during a period of vacancy. You need to take the cost of repairs into account, particularly if upgrades are needed to obtain the homeowners’ insurance that is required before you can close on your mortgage.
- Determine who you will be buying from
When researching foreclosed properties, it is imperative to find out who holds the title. Many foreclosed homes are owned by the lender that initiated the repossession, but others are owned by a third-party entity charged with repaying the debts. Some properties may still be held by an owner who is in pre-foreclosure. Find out how the house is being sold so you know if you can submit an offer or if you must compete for ownership at a public auction.
- Contact the owner and submit an offer
Depending on the property’s status, you may be able to make a traditional offer, bid in an auction, or work with the defaulting owner in pre-foreclosure. Your real estate agent can facilitate the purchase process by submitting your offer and communicating with the seller.
Freedom Mortgage is a trusted lender who can help you with this process.
If you want to know how much you can afford to pay for a foreclosed home, you can get a rough estimate by using our Affordability Mortgage Calculator. Then, take the next step by calling Freedom Mortgage to obtain a pre-approval. Visit www.freedommortgage.com for details.
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