Buying a foreclosed home can give you the opportunity to realize substantial appreciation in the property. If you are considering purchasing a foreclosure, a few items will be required. This is a process that involves a great deal of work, but it can be extremely rewarding if you choose the right property.
Pre-Approval
One item that you will need is a pre-approval from a lender. If you plan on buying a home through a foreclosure auction, you will need to be able to prove that you have access to the money needed to pay for it. When you attend a foreclosure auction without a letter of pre-approval from your lender, you may not be able to buy the house. To get pre-approved, you will need to go to a lender and apply for a loan. Your lender will then provide you with proof that you can get the money you need when it is necessary.
Real Estate Agent
Having a qualified real estate agent can also be extremely beneficial during this process. A real estate agent will know your local market and can provide you with valuable insight. If you are having trouble finding a foreclosure that meets your needs, a real estate agent may be able to help. Real estate agents generally get tips on foreclosures before they become available to the rest of the market. You could potentially buy a home just before it goes into foreclosure with the help of your agent.
Savings
To buy a foreclosure, you will usually need to have some money in savings. You may have to use some of this savings to come up with a down payment for the purchase of the property. On top of the money for the down payment, you may need some additional money to fix up the property once you buy it. Many foreclosed homes are in disrepair, and you might need to invest thousands of dollars to get a house back up to normal living standards.
Contractor or Inspector
Before buying, you should have someone inspect the property so that you can find any serious flaws with it. You do not want to buy a property that has serious issues like mold or structural damage. By hiring an inspector or contractor, you can get an estimate of how much it will cost you to fix the property up after you buy it.
