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Tips for Buying a Foreclosure

As a homebuyer, it is important to know your options when buying a home. We have listed our top 5 tips to help you when choosing to buy a foreclosure.

  1. Know that foreclosures are sold “as is”— When a home is sold “as is”, it means that the house is being sold in whatever condition it is currently in. This could mean that the house needs little to no repairs, or major repairs.
  2. Examine the house before purchasing— Having a home inspection will help you to see what the house looks like inside and out before you make an offer. This is important because if you do not check the house in advance, you may come across issues with the home that you were not aware of. At this point, you would have already purchased the home and would have to spend additional money on repairs.
  3. Budget carefully— Buying a home should be an exciting experience that you are truly prepared for. Knowing how much you can afford to buy a home is vital to a successful home purchase. You do not want to make an offer and later find out that you are way in over your head.

Bonus: Budgeting will allow you to factor in any additional costs such as unexpected   repairs, and potential tenants if you choose to rent the home to someone else.

  1. Get pre-qualified from a lender— You will have better chances of securing a foreclosure if you are already financially prepared instead of waiting for a loan approval. This shows the seller that you are ready to buy the home and he or she will not have to wait for you to obtain secured financing.
  2. Buy from a lender that is bank owned— Bank owned foreclosures are the same as real estate owned. You can find a professional real estate agent and purchase one of their foreclosed homes. Foreclosures can be bought in a public auction. Please know that buying through a public auction means that you will bid against real estate professionals. You can also wait for a real estate agent to purchase the property, and buy it from them.

At Michigan Real Estate Masterminds, we understand how important it is for you to be knowledgeable about the home buying process. We know these tips will help guide you in the right direction when choosing to buy a foreclosed home.