Most people look at a foreclosed property as a pure investment property and never plan on living in the home, though there are a few who will purchase a foreclosure as their next home in order to score a good deal. Given that there are over a million homes in the United States in some stage of the foreclosure process, there are indeed lots of deals to be had. Here are a four tips to consider when looking to purchase a foreclosed home:

1. Look at REOs for your first deal. REOs (Real Estate Owned) are properties that the banks have already foreclosed on and are now looking to get rid of. One of the benefits of buying an REO property is that you have the chance to inspect the property, where with foreclosure auctions there is no time for inspection. Also, REO property transactions work a lot like a regular transaction where you can obtain financing as opposed to the auctions where you have to have the cash for the full purchase price the day of the auction.

2. Arrange financing before submitting offers. You have to remember that other people are shopping for great deals on properties too. You need to make sure you have your finances in line so your offer looks attractive to the bank or whoever owns the property you are looking at.

3. Find help from an experienced professional. Finding a trained buyer’s agent to help you through the process of your first few foreclosure deals will help you find your footing. Try to find an agent who is familiar with the purchasing of distressed properties, short sales and foreclosures. 

4. Have an inspection done on the property. If you are buying a REO, you can have an inspection done. This is important because most houses in the foreclosure process haven’t been maintained and often require extensive work. Having the inspection done will give you an estimate of how much it will cost to fix the house up, and you can see if there is going to be any profit in the property or if you should pass on it.

At Title Junction, we care about helping you stay informed throughout your real estate transaction. The experts at our title company have extensive knowledge about real estate not only in Cape Coral and Fort Myers, but all of Florida as well.

Have questions? Give us a call at 239.415.6574.

In case you missed it, check out our last Title Junction post: What Are 203(B) And 203(K) Loans?

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