You can make a real bargain by buying a foreclosed home. However, you need to be careful about certain aspects so that you can make a good deal on the property. Here are a few tips which you can follow if you want to get a real bargain on a foreclosed home.
- Calculate the repairing cost of the property – When a homeowner struggles to make the monthly mortgage payments on time, it is quite evident that he/she hasn’t been able to do the necessary maintenance work. Therefore, when you’re interested about a foreclosed property, estimate the cost of repair work in order to decide whether or not the buying price is more. This is because you also add the cost of repair work along with the buying price of the property.
- Look at every details of the property carefully – Usually when a property is listed, a real estate broker puts a few snaps of the house in the website. However, by looking only at these snaps, you might not get an idea whether or not there is a good landscape at the backyard. Similarly, a fault may come to your notice when you look at the property carefully. Therefore, always have a licensed home inspector with you when you go to have a look at a house, which you’re keen to purchase.
- Purchase with cash if it is possible for you – Some lenders prefer cash transactions over bank financing. Therefore, a lender might give a bigger discount if you buy a property with cash. If you cannot buy with cash, then get prequalified for a mortgage loan so that you can quickly do the necessary formalities as soon as you find a suitable property.
- 4.Look out for mispriced real estate listings – You can find out properties which are overpriced. Usually, people are less interested about such properties and therefore, they aren’t sold for a long time. So, when you are interested for such a property, the bank usually acts fast and can strike a deal in your favor.
- Make sure neighborhood properties appreciate in value – Do you know that a good neighborhood helps in marking a high price for your property? Yes, this is true. Therefore, before you buy a foreclosed house, check out whether or not it is a good neighborhood and the properties in the area appreciate in value. Also, look whether or not there are shopping destinations, good schools, etc. in the neighborhood. Along with it, make sure there are not many foreclosed homes in the surrounding. All these aspects will help you in quoting a good price when you want to sell your property.
- Consider buying a title insurance policy – It is better if you buy title insurance, even if you’re obtaining a mortgage loan. By doing so, you will be protected against any liens which might have not been disclosed, and the eligible person may claim it later in future.
- Try to buy such properties at certain times – Though you may not want to believe the fact, but, it is true that the banks want to close deals more if you make an offer at the end of a month, at the end of a quarter or a year. Therefore, the best time to approach a bank is during November-December. The banks will want to close the offer by the end of the year and in the process, you might get a good deal.
In the last, it should be mentioned that always work with a real estate agent when you decide to buy a foreclosed home or, when a foreclosed property matches your criteria. Also, think like an investor and not as an eager buyer, when you decide to buy such a property. Always work with a real estate agent, a home inspector and calculate the cost of the repair work so that you are sure that you are getting a good deal on the property.