When a home is foreclosed, the bank or lender wants to get it sold as quick as they can. Lenders are not in the real estate business, so they will use a real estate agent to market the property. You can also buy a foreclosed home through the multiple listing service, but that can be filled with problems. Here’s 4 tips to help you buy a foreclosed home.
1. Choose a foreclosure sale expert.
Lenders will usually sell a foreclosed home through a real estate agent. We can help you find foreclosed homes for sale.
As real estate experts, we have experience selling foreclosed properties and can guide you through the process.
2. Work with your agent to set a price.
Ask your real estate agent to show you closed sales of comparable homes, which you can use to set your price. Start with an amount well under market value because the lender may be in a hurry to get rid of the home.
3. Get your financing in order.
Many mortgage market players, such as Fannie Mae, require buyers to submit financing preapproval letters with a purchase offer. They’ll also reject all contingencies. Since most foreclosed homes are vacant, closings can be quick. Make sure you have the cash you’ll need to close your purchase.
4. Expect an as-is sale.
Most homeowners stopped maintaining their home long before they could no longer make mortgage payments. Be sure to have enough money left after the sale to make at least minor, and sometimes substantive, repairs.
Although lenders may do minor cosmetic repairs to make foreclosed homes more marketable, they won’t give you credits for repair costs (or make additional repairs) because they’ve already factored the property’s condition into their asking price.
Lenders will also require that you purchase the home “as is,” which means in its current condition. Protect yourself by ordering a home inspection to uncover the true condition of the property, getting a pest inspection, and purchasing a home warranty.
Be sure you also do all the environmental testing that’s common to your region to find hazards such as radon, mold, lead-based paint, or underground storage tanks.
Check back on our blog every week for more real estate advice and local articles about living in Albuquerque. And make sure to follow us on Facebook for up to date real estate news for Albuquerque and surrounding areas.
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