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Finding the Best Foreclosure Properties

Buying a foreclosed home, whether it’s a pre-foreclosure or already in the foreclosure process, can be the answer to finding your perfect home at a bargain price. If you are thinking about purchasing a foreclosed home, you will need to have the right information available in order to find the property that meets your needs.

There are a lot of different things to consider with a foreclosed home that you don’t have to worry about with a traditional resale home. Many people have found it pays off in the long to get some foreclosure assistance as far as what to look for in foreclosure properties to make sure you get the best buy.

Read on for tips on what you should know when looking for a pre-foreclosure or foreclosure property.

Understand the Foreclosure Process

Before you start looking for foreclosure property, you should be sure that you understand the procedure for buying a foreclosed home. You need to be aware of the differences between making an offer on a home during the pre-foreclosure period, bidding at public auction, and buying bank-owned properties.

You should also know whether your state allows for a redemption period for the owner after the home has been sold.

Get Pre-Qualified First

Before you begin seriously looking for a home, you should contact a mortgage lender and get pre-qualified. Pre-qualifying for a home loan will tell you exactly how much you can afford to spend. If you can only qualify for a $150,000 mortgage, there is no sense wasting time looking for a $200,000 home; but if you discover that you can afford to spend more, then you will be aware of your options.

Decide What You Need/Want in a Foreclosed Home

Before getting into the foreclosure listings, you will want to pin down exactly what your needs are and what you really want in a home. Are you looking for a single-family home in the suburbs with room for the kids to play, or would you prefer a condo in a quiet community? The number of bedrooms and bathrooms you need are a major consideration, as well as the number of floors, lot size, and condition of the neighborhood.

Once you have narrowed down your requirements, you will be able to focus your search on the properties that make sense for you.

Visit the Neighborhoods With Foreclosure Properties

Before you make an offer on the home, take a drive around the neighborhood. Do the other homes present curb appeal, or is the neighborhood in disrepair? Is it close to schools, shopping, major highways, and other amenities that are important to you? Only if you would feel comfortable living in the area should you consider buying a home here.

If you have doubts at any time during your search, don't be afraid to back away and start over. If one property is not suitable for your needs, keep looking - don't buy into something that does not meet your requirements.

Research the Property

This is a critical step in choosing a property that will work for you. Once you have located a home that interests you, you should get all the information you can.

  • Keep in mind that foreclosure properties are sold "as is." Any necessary repairs will be your responsibility once you own the home. The price of a professional home inspection is well worth the trouble it will save you if there is structural or roof damage that entails expensive repairs.
  • A title search will reveal any existing liens on the home. If you buy during the pre-foreclosure period, any liens on the property will still be attached. Any back taxes and other assessments must be satisfied before closing - you do not want to close on a home without a clear title.
  • Look up recent real estate deals in the surrounding area. Finding out the selling price of similar houses nearby will give you an idea of the market value of the home you are considering; this is important in determining whether you are getting a good value for your money.
  • Calculate all of your costs, including purchase price, closing costs, and any necessary repairs, as well as any back taxes and legal fees. Make sure that your expenses will not outweigh the discounted price you expect to pay on the home.
 

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