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How to purchase a foreclosure home

1. Get Pre-Qualified for a loan – It’s just a waist of your time if you first do not get pre-qualified for a loan. Some foreclosures get multiple offers from very interested and pre-qualified buyers. If you’re not pre-qualified in most cases if not all, you will be excluding yourself from submitting an offer on the home. Pre-qualification allows you to know exactly what your buying power is. You will receive a letter from the pre-qualifying bank or lender stating the amount that you are pre-qualified for and it must be submitted with your offer. Furthermore, you will know exactly what foreclosure homes to look for and in the price range to you qualify.

2. Find a Realtor - Find a licensed realtor that specializes in foreclosures and knows your local market and housing trends. If you are interested in purchasing government owned properties such as HUD homes, make sure your realtor is HUD-certified.

3. Prepare a Budget – It is very important to have a budget when considering purchasing a foreclosed home.  Some of these homes may require fix up and often times new appliances.  Know exactly what you can spend on the purchase price including any fix up cost. If you are purchasing the home to sell and not occupy, factor in the After Repair Value (ARV) value of the property, closing cost, and commissions once the property is complete and ready to sell. Make sure your potential profit margin is there and it is worth it for you to proceed. Make sure your realtor runs the comparables in order to price your property appropriately. Follow the same as above if you plan to rent the property

4. Find the Property – With your realtor, find the property that is suitable for you and meets all of your budget requirements. View and do a walk-through of the property.

5. Make an Offer – Once you are satisfied with the property, make an offer.

6. Appraisal & Inspection – If your offer is accepted, immediately get a property inspection with a licensed and reputable home inspection company and get the as-is value of the property through a licensed and reputable appraisal company.

7. Buy The Home - If the property inspection and appraisal meet your satisfaction, purchase the home to occupy or fix it up and sell it for hopefully a nice profit.

1. Be sure to hire a reputable Title company to make sure there are no liens on the property

To learn more about buying a foreclosure, come to one of our foreclosure seminars and workshops. For available seminar and workshops dates, times, and location [click here].