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Foreclosures: What You Need to Know Before You Buy Know your budget: Don’t get fixated on the low price, there are other things to consider; Do you have money for repairs? Can you do the repairs are will you have to hire out? How long will it take to do the repairs? If the home isn’t for you to live in, can you afford the house if you can’t rent it out right away? Get pre-approved: If you are going to pay for the home with a home loan, get approved before you start looking at homes. Some lenders will not loan on distressed properties that are in bad condition so talk to your lender, tell them what your plans are. See the house: Never a foreclosure house sight unseen. You need to understand the condition of the home before you invest your money into a home inspection. Get a home inspection: The previous owners were under financial stress so chances are maintenance on the home has been neglected. In some cases the previous owners were very angry about their situations and did damage to the home as they were leaving. Look at the neighborhood: You may not be able to recoup the cost of the repairs if the value of the house is depressed by widespread foreclosures or high crime in the rea. How long has the house been empty: The longer a home has been vacant the more damage there is. Plumbing seals dry out, sewer gases back up and bugs get a chance to get into the home. Look at the Landscaping: Chances are the home has been neglected and so has the yard. As Is: Most foreclosed homes are being sold "AS IS". So don’t expect the bank to do the repairs. Bank Addendums: When buying a REO property the bank will insist on the Buyer signing their addendums which may change many terms of the contract, such as closing dates, inspections periods, etc… Work with a Realtor who has had experience with foreclosure, bank owned properties. They can guide you through the process so that your bank owned property purchase goes smoothly. For the |