Steps For Purchasing Foreclosures
People looking to buy a new house may have considered trying to pick up a foreclosed property because of the normally lower prices
. These "distressed" properties may fall into a number of categories all meaning basically the same thing: foreclosures, real estate owned (REO), and short sales. Short sales occur when the homeowner has received permission from the bank to sell their house at a reduced amount. In other words, they have defaulted and the house would be foreclosed on anyway. Even though it may be possible to get a good deal on one of these properties, it can be somewhat difficult to get a sale finalized.There are some things that you should do differently than you would if you were simply buying a listed house. The first thing to do is to get approved for a loan amount. Many home buyers want to find a property before they go through the hassle of getting financed. Banks that have foreclosed properties listed have a tendency to only work with a small amount of brokers. These brokers are often extremely busy as the number of foreclosures continues to rise. They do not want to waste their time with a person unless they are shown to be serious buyers. Having a approval letter will go a long way when you finally get a meeting with one of the brokers. Do not rely on getting financed by the bank that owns the house you are trying to buy.
Now it's time to find a broker who specializes in these types of properties. One way to get in touch with one of these agents is to check online listings. While you may see some properties that you like, you should be using these listings to get in touch with an agent. Once you are able to make an appointment with one, make sure to ask about the other listings as well as upcoming listings. There is sometimes a long delay between foreclosures becoming available and them being added to the online databases. This is your chance to see some houses before everyone else is eying them.
When considering an offer, remember that REO homes are normally sold as is. This means that getting a lower price because of damages is very unlikely. Do your research and look at the selling price of similar properties. With so many foreclosed properties on the market, there are many being sold. If similar houses are selling for asking price, then the bank will probably not be happy about accepting a lower bid. Just because they are trying to get rid of it doesn't mean they are willing to give it away. Along the same lines, there are often multiple bids coming in for some of the homes. The bank is not going to play favorites and will often accept the highest. If similar properties are selling, go ahead and bid on the higher end of your budget instead of underbidding and losing out.
Another factor to keep in mind when making an offer is the length of time the properties are staying on the market. Houses that sell quickly will require close to asking price bids while houses that have been sitting for a long time with no interest will probably sell for lower. As long as you are willing to do the research and take the time to make reasonable offers, you should eventually find the home you are looking for with little trouble.
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