House buying concept

Five Things To Remember When Buying A Foreclosure

Foreclosures are abundant in today’s real estate market.  Bank owned homes often represent an awesome opportunity to purchase property well below market value.  Foreclosure listings are a distressed sale and require special considerations.

Because buyers are excited about the potential deal, they sometimes overlook some common pitfalls when purchasing a bank owned home.  Common sense applies when purchasing any property, including a foreclosure listing.  Make sure to consider the following five things before purchasing a REO home.


  1. Depositphotos_12690551_mGet a home inspection.  Foreclosure properties are sold as-is often after being vacant for months or years.  Although most corporate sellers do not make repairs, it is good to know what exactly is wrong with a property prior to purchasing it.
  2. Make sure your contract includes title insurance.  Title insurance is a buyer expense in some REO transactions.  This is a very important aspect to protect a buyer from future title issues and marketability.
  3. Research values carefully.  Understand the neighborhood and recent sold comparables in the location of the new purchase.  A licensed real estate agent can assist in this evaluation.
  4. Be patient.  Understand that sellers have various timeframes associated with processing transactions and approving offers.  It can sometimes take a week or two to negotiate a new contract.
  5. Insure the property at close.  Insurance companies are becoming sticter and more expensive (especially when insuring vacant properties).  An uninsured property (even when purchased with cash) is a liability and should be appropriately insured.


Don’t let a foreclosure bargain override common sense real estate transaction details.  Following these few key points can help prevent a myriad of pitfalls.  When questions arise, see out the help of a licensed real estate agent or legal representative.

 

Author:  TJ-Google+

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