If you’re new to the real estate world and searching the listings, you may have seen advertisements for foreclosed homes for sale. A foreclosed home is a property sold to pay off a debt because the borrower has failed to do so. The borrower’s failure to make sufficient and timely payments required by his mortgage contract, the lending party seizes and sells the house in a hurry, in order to pay off the loan. Since lenders are eager to make back the money, foreclosed homes usually sell at reduced prices.
Taking Your Chances
If you are interested in a foreclosed home for sale, understand that the transaction is often tricky, but the potential for profit is great. Legal procedures will vary depending on which state you are purchasing the home in. Look into the advantages available to you to make sure you are getting a valid and worthwhile deal. Often foreclosed homes will sell for discounts of 30 percent and higher.
How To Do It
You will definitely want to find an agent who has previous experience with foreclosures. Some sellers in a foreclosure deal will refuse to accept offers from any buyer who is not represented by an agent. You can search specifically for foreclosure listings in any real estate advertisement forum. The internet is particularly great because you can just type “foreclosed homes for sale” into a search engine and narrow your hunt down significantly. Check magazines and newspapers as well, and phone lenders for foreclosures lists. Certain government agencies will advertise foreclosures, like the Department of Housing and Urban Development. You can examine the website at your leisure for more information.
Once you’ve found some potential properties, make sure to tour them at least once with a scrutinizing eye. You may be on the market for a fixer-upper, but some foreclosures can be in very bad shape in terms of disrepair and ill maintenance. This is not true of all foreclosed homes for sale, but you should still be wary. You will also want your agent to check around and make comparisons to see if you are getting a truly good deal.
Closing the Deal
After checking your credit report to make sure everything is in order, find out who the listing broker is and you are ready to place your offer. At this point you should be fully aware of all costs involved and liens on the property. You must know who is liable for any outstanding costs on the foreclosed house.