3 Points To Remember When Buying A Foreclosed House

3 Points To Remember When Buying A Foreclosed House

When a homeowner stops paying their mortgage payments, a bank or other financial institution may decide to foreclose the property and evict the owner.  At that point, the property belongs to the bank, but banks are in the business of offering home loans, not acting as landlords.  This means they usually put the property up for sale immediately in an auction, and often they set the initial price low so someone can take it off their hands quickly.  Sometimes the next owner can get the property for an incredible bargain.

However, buying a foreclosed house involves more than just the price.  You need to think about other bidders, the state of the house, and the state of your own finances.  For many Americans, including those in Sacramento, CA buying a house is the most expensive purchase they’ll ever make.  That’s not something you should take lightly.

Prepare Your Finances Ahead Of Time

Because of the low prices and because banks don’t want to hang onto land for long, foreclosure sales tend to start and end quickly.  Because of that, you should get everything lined up on your end before you even start searching.  That means building up your credit score, figuring out how much you can spare in monthly payments, and getting a pre-approval letter (or even more than one) that shows how much you can borrow from a financial institution.  If you wait until after you find a nice home, it might be off the market by the time you’re ready.

Find A Broker And Do Some Research

Because foreclosure properties sell fast, it’s a big help to speak to a realtor that handles foreclosure sales.  This makes it easier to respond as quickly as possible when a new property enters the market.  At the same time, you should be keeping track of how much homes cost in the area and how quickly you can expect to sell your current residence if you plan on moving.  Knowing all this and having a realtor on your side makes it easier to bid with confidence.

Remember That Foreclosed Properties Are “As-Is”

Banks don’t renovate foreclosed properties, and they don’t perform many inspections unless the law requires them to.  A foreclosed property in Sacramento, CA might also contain some of the furniture left behind by the last occupant.  This creates a very “buyer beware” situation, and so you should expect to do some repairs on a bank-owned property before you can fully move in.  To that end, you should contact home contractors you can trust to help inspect and repair the building.

Foreclosed buildings are a tragedy for some but an opportunity for others.  However, if you’re in the second group, you need to be ready for how fast bank-owned sales go.  You also need to realize that home repair costs may eat up the lower price you’re getting.  Still, if you know how to bid, you’re prepared for repairs, and you have a line on foreclosed properties in Sacramento, CA you can make the most of a foreclosure sale.