Whether you’re looking to buy a home for yourself or are wanting to find an inexpensive way to add more property to your investment portfolio, purchasing a piece of property that’s been foreclosed on could be a great option for you. However, acquiring this type of property often comes with more challenges than you might think.
Luckily, there are a few things you can do to help make this whole process easier on you and increase the chances of you landing the deal for the property. To show you how this can be done, here are three tips for buying a home in foreclosure.
Make Relationships With Real Estate Brokers
Buying a property that’s foreclosed is different than just finding a home that’s on the market to be sold. Rather than working with a real estate agent, it’s usually best if you work with a real estate broker instead.
According to Dori Zinn, a contributor to Bankrate.com, when a lender forecloses on a home due to insufficient payments on the loan, the lender will usually contact a real estate broker to help with the sale of the property. Because of this, it can be very helpful if you have a relationship with the real estate brokers in your area so that you can quickly get the information you need to make a move on a foreclosed property.
Get An Up-To-Date Inspection
When a home is foreclosed on, there will usually be an initial inspection done on the property for the lender. However, depending on how long the property has been sitting vacant, that first inspection might not be telling you the full picture of how the property currently in.
To ensure you’re not considering buying a home with issues you aren’t aware of, Jeanne Baron, a contributor to This Old House, advises that you get your own private inspection done on the property before you sign on the home. Especially if you’re serious about wanting this property, it’s well worth it to spend the money on a private inspector rather than getting saddled with a home with more issues than you wanted to take on.
Get The Right Pre-Approval Letter
In our current economic climate, especially when it comes to the housing market in many areas, there’s likely going to be a lot of competition for homes that are under market value. Because of this, you’re going to want to do everything in your power to give yourself a leg up on closing the deal yourself.
One way to do this, according to Elizabeth Weintraub, a contributor to The Balance, is to submit a pre-approval letter with your offer on the home. To make the deal even sweeter, you might want to get a pre-approval letter from the same lender that currently owns the property, as they might trust their own institution more than an outside one.
If you’re wanting to buy some foreclosed properties, consider using the tips mentioned above to help you do just that.