Darin and Christina Cunningham | Re/Max Elite
278 Franklin Road Suite 190 | Brentwood, TN 37027
Office: 615.661.4400 | Fax: 615.661.4115
Christina: 615.394.4168 | Darin: 615.456.4086

What You Need To Know About Buying Foreclosures

When you are purchasing a home and need a bargain, a foreclosure can sometimes look like an ideal option. Foreclosed properties usually sell for less than homes listed on the open market. Before making a decision and moving forward, make sure you know as much about the foreclosure as possible to avoid making mistakes.

Getting educated about what you don’t know regarding buying a foreclosed property can be challenging especially if you are not a professional real estate investor.

When buying foreclosures, the best option is to buy with the help of a real estate agent. They know the market well, and they know what to look for in a foreclosed home so you don’t end up getting yourself into a costly mess.

Here are some of the things you should be aware of before buying a foreclosure:

Foreclosure inventory is going down

It’s becoming more difficult today to find a foreclosed property than before. The reason for this is because fewer homeowners are falling into foreclosure. People have become wiser and fewer people are getting behind in paying their mortgages. There has been a significant drop in the foreclosure inventory

Two ways of buying a foreclosure

There are two primary ways you can buy a foreclosed home. First, lenders auction the house after the owner of the home stops paying mortgages. The property is sold at a public auction.

The second and the best way for people who aren’t real estate investors is to buy the house after the bank takes it. The banked owned property is listed and sold by real estate agents.

Buying at an auction is not easy

In a public auction, buying a foreclosure isn’t easy. You will be competing with professional real estate investors trying who are trying to outbid you. The challenging part is that you will have to pay for the foreclosed home in cash. Not a lot of people have $200,000 or more in cash to use when a suitable foreclosure comes around.

Auctions are sight unseen

Buying a property at an auction doesn’t give you the chance to tour the interior of the property. This means you are buying blind and you don’t even see what you are buying. You have no idea at all the kind of damage there might be in the house and what repairs will be needed after you complete the purchase. Sometimes, foreclosures have extensive damage and could end up depleting the savings you had left after buying it.

It’s easier to buy a bank owned foreclosure

This is also recommended since there are fewer risks involved and you also have the option to tour the house unlike with a public auction. You can hire a home inspector and find out as much information about the house as you can. Use the information to decide whether it’s a good investment or not.

Buying a foreclosure is recommended if you have a real estate agent by your side helping you out.  It can be a great way to get a discount on a property, but it can be a big gamble as well.

A real estate agent can help you minimize your risks.

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