Learn how to buy a foreclosed house. These tips will help you with all the basics to get started. First, you should find out if you can prequalify for a mortgage before you begin your search.
Purchasing real estate is a lot different than any other purpose, plus it’s a lifetime investment. If the property has been taken back by a bank, the terms could be further tightened, varying state to state. However, it goes back to what you credit score is, which will determine what your interest will be.
Sometimes a bank or lender might want to sell the house at a significant discount, upwards of 30 percent or more, but keep in mind that you might need money to fix minor repairs and for a downpayment.
You should always have a real estate agent representing you, especially if it’s bank-owned property. Some sellers, especially banks, won’t accept offers outside of a broker. The agent will do all the paperwork and communication, which will save you a lot of time.
Be sure to check your credit report and correct any outdated information with Equifax, Experian, and TransUnion. If you get pre-qualified for a mortgage, you can get a lower interest rate, depending on your credit score. Make sure you have money to put down because there’s no such thing as zero down.
One of the most important things you need to check is if it has any liens placed on it, such as unpaid taxes, or liabilities that the previous owner never paid.
Finally, you should always have the property inspected by a professional when you want to buy a foreclosed house. These inspections will cost anywhere from $100 to $300, depending on the size of the unit. The results could be in your favor to deal and negotiate on the purchase price.