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.

Inspecting A Foreclosure Property

Foreclosed homes, like any other homes, need a thorough inspection especially to rule out any huge safety issues. Although buying a foreclosure sometimes allow you to save thousands of dollars, it’s important that home inspection is done to ensure that you also won’t need to pay thousands of dollars just to repair any damages or renovate the house. Here are some of the common areas that you need to pay attention to during home inspection.

Molds and pests. Pests like bats, termites, rats, and squirrels among others like living in a place that’s quiet and a vacant foreclosed property can give that to them. Therefore, you shouldn’t be surprised to find some of these during your home inspection. You’ll usually see chewed boards or droppings during your home inspection indicating their presence in the property.

As for the molds, when you notice that there’s a musty odor when you enter the property, then this may indicate the presence of molds. You’ll usually find some odors on empty toilets or sink traps.

Utilities. An important part of the inspection is checking whether all the utilities – water, gas and electricity are still functioning. Therefore, before a home inspector examines the property, be sure that you’ve already arranged all the utilities to be functioning to determine their condition.

Theft and vandalism. Since some of foreclosed properties are left vacant or abandoned for quite some time, people may start vandalizing in both the interiors and exteriors of the property. Together with this, vacant houses also become prime targets for theft, which is why some items in the property might have gone missing. Hence, a thorough inspection is needed to determine which areas of the property needs replacement, repair or renovation to ensure that it doesn’t compromise the safety of your family once you live there.

Damages from foreclosure rage. Although this isn’t common, some previous homeowners start to damage the property they’re going to leave during the foreclosure proceedings. You’ll usually notice damaged wall sockets as people yank the plus or broken windows glasses or holes in the walls or doors where the fists or feet of the homeowners went through. Sometimes, it might just be because the homeowner doesn’t have any money to make any renovations or repairs on the property.

Are you eyeing to buy a foreclosed property in Charlotte? Do you need a home inspector to help you? Get in touch with Showcase Realty as we know the right professionals to help you get on a thorough home inspection.