6 Tips on How to Buy a Foreclosure
Foreclosure is not easy and it can get complicated but if you do get past through the ordeal, it will not only be worth it but it can test your patience as well.
In an article from Bankrate, Robert Jenson, owner and founder of the Jenson Group at RE/MAX Central in Las Vegas said that "Buying a foreclosure is definitely a bit of a grind. It's not easy. You're getting fantastic pricing, but sometimes it takes going through a lot of houses and writing a lot of offers to get the home you want."
So if you're on your way to buying a foreclosed home, you might need these tips:
Keep reminding yourself that delays happen. It might take days and even weeks for the bank to sign paperwork. Now if you need to be in a home as soon as possible and you have nowhere to go then purchasing a foreclosure won't work for you. As stated by DIYontheCheap's blog, "Foreclosure situations are unpredictable, and delays can and probably will arise."
Know how long the house has been vacant.
The longer the period the home has been vacant, the greater the chance for major issues. That would mean leaks, plumbing problems, air/heating issues, and even pests. Check the toilet and faucets once you're in for a visit. These repair costs can turn an affordable house into an expensive one if you're not careful.
Do a Thorough Inspection.
Usually, banks do not make repairs on foreclosed homes so don't expect everything to be perfect. If needed, hire a heating and cooling inspector, a pest inspector, and even an engineer. A thorough inspection is the best expense you will ever have in the front end process compared to a lifetime of house issues.
Do your Final Offer early in the process.
If the foreclosed house is in a sought-after area, bidding wars is actually common. Try to avoid the situation by doing it "early".
Choose an Enhanced Title Insurance.
When choosing between enhanced and standard title insurance, definitely go for the former as it offers better protection which is especially needed when getting a foreclosure. Though it may cost a bit more, an enhanced title insurance somehow covers more than the standard.
Meet the Neighbors.
Yep, do find time to meet the neighbors when you're ready to buy a foreclosure. Ask for any info regarding the house - floods, damages, safety of the neighborhood, etc.