Foreclosure. It’s certainly not a word you learn in elementary school. Likely, you can happily go through life without having a clue of what the word means. And, after all, why would you want to? It sounds ominous, it’s not used in everyday conversation, and it starts with the letter ‘f.’ But when you’re buying a home, the word foreclosure can become one of the important words in your vocabulary. Here’s what foreclosure is all about, and what you need to know about buying a home in foreclosure.
What is Foreclosure and Why Is Buying A Home in Foreclosure Worth Consideration?
Simply put, foreclosure is what happens when a homeowner fails to keep up with his mortgage payments – the lender or bank seizes the house and puts it up for sale to a new owner. This gives the lender a chance to recoup on his losses and may also give a lucky individual a chance to get a great deal on a house!
The Bank Owned Stage Vs. the Real Estate Stage
Bank owned houses are in the early stage of foreclosure. The bank has begun the legal process of removing the previous owner from the property. It may be worth noting the previous owner may not go quietly. He or she may choose to “squat” in the house, and it could be time-consuming and difficult to remove him or her. Once this is done, by hook or by crook, the bank will put the house up for auction.
If the house does not sell at the auction, it goes into the Real Estate Owned stage. At this point, the bank will go about selling the house through an agent who specializes in real estate sales. This is where you could hit the real estate jackpot.
Check out RealtyTrac.com to get reliable data on foreclosed auctions, short sales, and bank-owned properties.
Steps to Buying A Home in Foreclosure
As real estate investor T. Harv Aker once famously said, “You don’t wait to buy real estate, you buy real estate and wait.” In other words, you want to move quickly on a good deal and then wait for it to appreciate before selling it. When you’re buying a home in foreclosure, moving quickly is a top priority. Here are some tips to prepare you for buying a home in foreclosure.
1.) Find a real estate agent who specializes in foreclosures.
An agent who specializes in foreclosures will keep the transaction running smoothly and act in your best interests. Start your search by visiting websites with a database of foreclosed homes in the area you are interested in. Look for realtors who have had specific training in foreclosure, such as the CDPE (Certified Distressed Property Expert) or the Short Sales and Foreclosure Research (SFR) designations.
2.) Get a pre-approval letter.
If you don’t cash in hand when you make an offer, a pre-approval mortgage letter is a close second. The letter gives a detailed breakdown of how much money you can borrow based on your lender’s evaluation of your credit scores and income.
3.) Look at the “comps.”
Have your agent run a comparative market analysis so you can get an idea of what similar properties, or “comps” are selling for.
4.) If the other foreclosures are selling quickly, go for the higher bid.
When the other foreclosures are selling like hotcakes, have your preapproval letter in hand and make a competitive offer. Keep in mind that foreclosures are already discounted, so a very low bid may be a nonstarter for the bank.
5.) Foreclosed homes are As-Is.
And yes, you will need to do repairs. That’s because no one has lived in the house since the bank took it over, and a bank, looking to maximize its profit, is not exactly pouring money into its upkeep. Get a home inspection so you know what you’re in for before you make your offer.
Colonial Van Lines Wishes You Luck
Buying a home in foreclosure is risky business. Moving long-distance shouldn’t be. At Colonial Van Lines, we value the trust our customers place in us. And that’s something we would never put at risk.
When you work with us, we treat every client like family and every move with the careful consideration it deserves. From our friendly approach at the door to our professional packing and transport, you’ll have the full service and attention that only a team of experts can provide.
Whether it’s coming up with a service plan that works with your budget or coming up with a plan to get your belongings to your destination as conveniently as possible, you can count on our reliable team to get it done with the exceptional service that comes from years of experience and dedication to our customers.
Customized Service Plans
At Colonial Van Lines, your wish is our command. You tell us your moving details and we’ll come up with a tailored plan to optimize your time and minimize your cost.
If packing is nerve wracking, our experts at Colonial Van Lines will gladly help out. Our packing team has the knowledge to pack items quickly and correctly, and the courtesy to treat every item as if it were our own. We use special wrapping paper and bubble wrap to keep breakables in one piece and blanket wrap to keep furniture protected during transit.
When you’re buying a home in foreclosure, a reliable storage space can be invaluable. As a company that anticipates the needs of our clients, Colonial Van Lines provides climate controlled, spacious storage units available for short-and long-term storage. We offer versatile storage packages designed to help you access the exact services you need at the exact time you need them.
Free Rate Quotes
At Colonial, we would never dream of moving our customers’ belongings without giving them an idea of what they can expect to pay for our services. Our reliable free rate quotes are designed to provide you with an expense breakdown so you can see where your costs are coming from before you sign a contract. No fine print, no hidden fees, and no supplementary services. Just honesty, transparency, and superior service you can depend on.
Whether you’re buying a home in foreclosure or simply buying a home, Colonial Van Lines is here to make your moving experience seamless. Contact us today for a free rate quote, and we’ll get the show on the road.