Before Buying A Real Estate Foreclosure Home

Before Buying A Real Estate Foreclosure Home

Bank owned real estate homes are typically priced incredibly low below the market value that they are appraised for. Since you are paying less than what it is worth, once the purchase is complete you now have equity in it without even needing to make a payment. In order to know if you're getting a great deal you need to know the real estate market that it is located in. Equity is highly dependent upon surrounding homes and the factors that should be analyzed include the price ranges of homes and trends in the market. The selling price may directly reflect the condition of the home. Typically the prices are lower if they need to be repaired.

Don't Be Scared off of Homes that Need Fixing

When you purchase a home owned by a bank you need to know that they do not get fixed before the purchase is made. They are sold on an as-is basis. Sometimes they may be in disrepair and need fixing but don't be scared off. You can gain equity in the home as long as you begin improving it. Some of them include updating the flooring and doing landscaping on the property. Other fixtures in the kitchen and bathroom can improve the home's value too. These are all minor problems. You should avoid major repair problems such as foundation problems or purchasing a home that needs a new roof.

Score Bank Foreclosures Before Others

An auction is held to try to sell the home before it gets placed on the market as an REO. Each auction varies. Some of them get only a few bidders while some others have many people who fight to get the property. The auction base price is how much the original owner owes on the home in addition to the fees that have been added for attorneys. You should always make sure that the property you are auctioning on doesn't have liens associated with it. You don't want to buy a home that has thousands of liens associated with it because you may not get such a great deal.

Always Get a Home Inspection

A home inspection should always be conducted when you buy a home whether it is brand new, a traditional sale, or a bank foreclosure. If you purchase a home that has an issue with something as major as a roof or the foundation you won't be getting a deal at all. This step allows you to get out of the deal if the results aren't as desired.

Redemption Period

A redemption period exists in many different states. During this time period the original home owner has the opportunity to get their home back even if an auction has been completed and the home sold already. The stipulations state that the original owner needs to pay off the complete balance on the mortgage before getting it back so it is a very rare occurrence but you need to be aware of all possibilities. Also hold off on repairs until the redemption period has passed.

Use a Foreclosure Agent to Assist You

Most people do not have any experience with foreclosures and the laws that are surrounding them. A foreclosure agent is a very valuable asset because they know the laws and have experience with foreclosures on a frequent basis. You won't have any losses because they get paid by the seller on a commission basis. This will help you get the home you want and allow you to do it in the easiest way possible.

Before you can begin you should first learn how to get bank foreclosures and find somewhere that allows you to constantly get updates about new ones.

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