How To Purchase A Foreclosure Property

How To Purchase A Foreclosure Property

Buying a house is certainly one of the biggest investments one will make in their lifetime. But it’s worth it because it’s an excellent long-term investment and you have a home of your own where your kids can grow up. Therefore, you certainly want to ensure that the home you purchase is right for you.

If you’re already in the process of house hunting and you are considering buying a foreclosed property, then there are some things you need to know on how to purchase a foreclosed property.

There are ultimately two ways to purchase a foreclosure property.

Buying the house in its pre-foreclosure stage. Pre-foreclosure, which entails purchasing the home before the auction, offers some advantages. First, you get to transact with the homeowner who is prepared to negotiate with you since they need or want to get rid of the property. This is an advantage to the property owner, as they won’t have to get “foreclosure” on their credit report. In short, this is a win-win situation for both parties.

Aside from this, you can well inspect the property, which isn’t possible in the traditional way of buying a foreclosed property. Since you’re dealing with the owner, you can as well choose on different creative financing options available today.

However, the challenge in such situation is getting in touch with the homeowner whether through you email them, call or knock directly on their doors.

Buying the foreclosed property at the auction. Referred also as the traditional way of purchasing a foreclosed property, the first step in this buying option is to call the title company that provided the foreclosure list to determine where and when the auction will take place, what the opening bid will be, and whether or not it’s still a go.

There are cases where homeowners get to save them home due to last-minute financing or getting help from their relatives or friends enabling them to get their house back.

If the property is still ready for auction, then you have to check with the title company regarding the auction’s protocol. Although it’s different from each state, generally it requires the homebuyer to have a certified cashier’s check to be able to bid. Furthermore, if you plan to bid higher than the opening bid, be sure that you check was made based on the maximum amount you plan to bid.

However, the downsides of such option are that you won’t have a chance to have a legit home inspection and that you will need the cash up front at your time of purchase unless you state have other rules. And needless to say, you have to hope that other bidders or homebuyers will not bid higher than you will so the property goes to you.

If you’re planning to purchase a home in Charlotte, foreclosed or not, get in touch with Showcase Realty at 704-440-0007. We assure a smooth and hassle-free home buying process.

To learn more about How To Purchase A Foreclosure Property listen to our podcast, How’s the Market: Real Estate. Real Answers, joined by Wes Pruitt from Reliance First Capital.