Whether you are shopping for your first dream home or a new home to downsize after the kids go to college, finding a great property on a tight budget can be tricky. Purchasing a foreclosed home is often a great option because these properties are often more cost-effective and readily available. Here are a few tips to help you navigate through the sometimes tricky world of purchasing a foreclosed home.
Understand What Purchasing a Foreclosed Home Means
When a homeowner falls behind on their payments, typically 120 days behind, the foreclosure process begins. Depending upon the state in which you live, the foreclosure process can take several weeks, months, or even over a year and the courts may be involved. People often purchase a foreclosed home because, in an attempt to recoup the cost of the foreclosure process and the property itself, the bank that owns the home will often sell the property at a discounted price.
How To Search for Foreclosed Properties
After the legal proceedings are finished and the home goes up for sale, the property will typically be available to purchase in two different ways: a sheriff's sale or a sale directly through the bank. Typically, if the property is sold through a sheriff's sale, there will be an auction. A list of the properties up for auction will be available online or in a local newspaper.
A bank-owned property, or real-estate-owned property as they are often called, can be sold directly by the bank. The listing for these properties will often be found on the bank's website. Whichever way you choose to purchase a foreclosed home, working with a Realtor can help you determine how exactly to bid on or directly buy the property.
Get Your Finances in Order
Finally, if you purchase a home through a sheriff's auction, you will typically pay with cash. You can pay for a bank-owned property that is not purchased through auction with cash, as well. However, if you purchase directly from the bank, the institution will often allow you to secure a mortgage. A Realtor can help you determine the best option for your budget and bank account.
Purchasing a foreclosure is often a great way to save money on your dream property. If you have any questions about how to start the process of searching for foreclosed single-family homes in your area, don't hesitate to contact a real estate agent.