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How to Buy a Foreclosed Home

April 20, 2012 | Comments: 0 | Views: 185

The unfortunate scenario when it comes to home foreclosures is that you are literally cashing in on someone else's misfortune. Although this may seem unsavory, it is the nature of the real estate market, especially today. More and more households are struggling with their finances and this always includes their mortgage. When it gets to a point where the payments are impossible or you are making payments towards a house that is worth significantly less in today's market the owners consider the option of foreclosure. As a buyer this can be a major opportunity for your first home or even if you are considering real estate investing.

Now, the reason you can obtain a foreclosed home so cheap is because the banks hate dealing with foreclosures because of the substantial loss they stand to take. This is why you will find foreclosed homes for as much as 30% off the regular value and this is where you as the buyer can really take advantage. Your first question may likely be how do you I find these foreclosed homes? This part is not as easy as looking online or visiting your local realtor's office. The majority of foreclosure sales are based on word of mouth. This can be through your banker who may know of an upcoming foreclosure sale or even a visit to the sheriff's office to check for foreclosure notices. Aside from this, driving around is really the best way to find foreclosed homes. Instead of a for sale sign in the front they will have a note taped to the door or window stating it has been seized by the bank or foreclosed.

What I am going to outline next are important steps to take when buying a foreclosed home. First, make sure you are able to actually view the home before buying and not only this have it inspected as well. There are many sheriff auctions that only permit sales on sight-unseen and yes, there is a good reason for this. It's fair to assume these homes are in need of severe renovations and overhauls in order for you to live in it or flip it. If you are new to the foreclosed home buying process I would not suggest a sight-unseen auction at all.

Next, you want to investigate the property and find out if there are any liens against the home and most importantly who is responsible for paying them. It is not a stretch to imagine that if their mortgage payments got away from them then perhaps so did their taxes and so on. Many people skip this step and find themselves responsible for paying someone else's liens once the sale is final. A real estate lawyer can easily help you accomplish this step and it is more than worth the lawyer's fees you'll pay.

Because you are dealing with the government and banks with a foreclosure sale expect to spend a lot more time filling out paperwork, this is a part of the buying process that cannot be avoided. If you remember the steps listed here you should have no problems buying your first foreclosed home!

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