Start your application to purchase your
dream home or refinance today!
Looking to see what you may qualify for?
Get prequalified today!
Curious about buying a foreclosed home? Here's what you need to know to get started.
When a homeowner can't keep up with their mortgage payments, they often have no other choice but to give up the property to the lender. These properties are called "foreclosures."
Since the lender is eager to sell the home and resolve the debt, they will list foreclosed homes at competitive prices --often well below market value.
This is what makes foreclosed homes so attractive to prospective buyers.
Look for listings posted as legal notices or auctions in your local newspaper. You can also find foreclosed homes on a bank's inventory list. You'll want to search under "REO" or "real estate owned" properties.
HUD also maintains a directory that you'll want to check out. They compile a list of homes owned by major mortgage investors, including those owned by government-sponsored entities Fannie Mae and Freddie Mac. It also includes listings for homes owned by the FHA and VA.
If you want to forgo all the hard work of searching, work with a real estate agent. They have access to the MLS containing every available listing of properties for sale, including foreclosed homes.
A short sale is when the current owner lists their property for sale for less than the balance owed on the mortgage. This is sometimes called a "pre-forclosure" property and requires lender approval. Since the sale proceeds go to the lender, they'll have the final say on accepting or rejecting offers.
Buying a house at auction typically requires a cash payment and comes with some risks. Some homes are put up at auction without an appraisal or inspection, so you may not know the property's condition or even its actual market value. If possible, ask to do a walk-through and arrange for a home inspection.
If the auction doesn't result in a sale, the lender will hire a real estate agent to sell it in hopes of recouping what's owed on the mortgage.
The biggest risk is that these homes are sold as-is. The government-owned homes might get structural repairs. However, for the most part, any repairs will fall on the buyer's shoulders.
An experienced real estate agent can help you navigate the hurdles of buying a foreclosed home.
Get your credit in good shape. Banks can be extra cautious about credit issues of potential borrowers looking to purchase a foreclosed home.
You'll want to get preapproved for a home loan from a mortgage professional to verify your income and assets.
Hire a certified home inspector to evaluate the home.
If it's a short sale, your real estate agent will submit an offer to the current homeowner. However, remember that the lien-holder will have the final say. For auctioned homes, contact the trustee or attorney for assistance. If the house is bank-owned, your agent will submit the offer to the bank's agent.
Bank-owned properties take longer to close than buying from an individual. But typically, it takes about 30 – 45 days for the sale to close.
Did you find this article helpful? Please share it and apply today to start your journey of getting a great deal on a foreclosed home!
Our Website strives to ensure that its services are accessible to people with disabilities. Our Website has invested a significant amount of resources to help ensure that its website is made easier to use and more accessible for people with disabilities, with the strong belief that every person has the right to live with dignity, equality, comfort and independence.
Our Website makes available the UserWay Website Accessibility Widget that is powered by a dedicated accessibility server. The software allows tr212061.lhp207.lhpdomains.com to improve its compliance with the Web Content Accessibility Guidelines (WCAG 2.1).
Our Website accessibility menu can be enabled by clicking the accessibility menu icon that appears on the corner on the page. After triggering the accessibility menu, please wait a moment for the accessibility menu to load in its entirety.
Our Website continues its efforts to constantly improve the accessibility of its site and services in the belief that it is our collective moral obligation to allow seamless, accessible and unhindered use also for those of us with disabilities.
Despite our efforts to make all pages and content on Our Website website fully accessible, some content may not have yet been fully adapted to the strictest accessibility standards. This may be a result of not having found or identified the most appropriate technological solution.
If you are experiencing difficulty with any content on Our Website website or require assistance with any part of our site, please contact us during normal business hours as detailed below and we will be happy to assist.
If you wish to report an accessibility issue, have any questions or need assistance, please contact us by sending an email to: ClearLake@HomeTrust.com