Tips for Buying Foreclosed Property
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You’ve probably heard you can get a good deal on a home by purchasing foreclosed property in your area. This is true in most cases, but there’s a lot you need to know about the process before you begin.
Entire books have been written on how to buy foreclosure properties. So if you’re serious about this process, you should purchase one or two of those books. At the very least, check them out from your local library and spend some time browsing through them. This will help you understand the general process of buying foreclosed property to save money.
I obviously won’t be writing a book in this blog post, but I will be sharing some of the key concepts involved with buying these kinds of houses. Here are three of the most important things a first-time buyer should know about foreclosed property purchases.
1. You Need A Foreclosure Tracking Service
You can actually find out about recent foreclosed properties in your area by visiting your county courthouse. When a mortgage lender forecloses on a property, they must file certain paperwork with the courts. So you can always chase down this paper trail to find local foreclosures for sale. But this can be a cumbersome process, and it can eat up a lot of your time. If you are serious about buying foreclosed property in your area, I recommend signing up for a tracking service to stay on top of the market.
You can learn more about these services (and even sign up for one) by reading this article on how to find foreclosure homes for sale.
2. Understand How the Process Works
We receive a lot of e-mails from home buyers who are stressed about the foreclosure buying process, mainly because they did not understand the process before they ventured into it. One of the biggest surprises people encounter is the length of time involved when buying foreclosed property — especially when you buy it from a bank. In many cases, it can take a lot longer to buy a foreclosure home than a regular home, because the process has to be approved through the bank.
So my advice is to research the process so you know what you’re getting into. A good place to start is our overview of the foreclosure buying process, which you can find right here on the website.
3. Check the Foreclosed Property for Liens
When you buy a foreclosed property from a bank, it will generally be sold to you as-is. That means there are no warranties or guarantees of any kind. Sure, buying such properties can save you a lot of money. But it also means more homework on your end. Liens are one of your research requirements, or at least they should be. A property lien is a claim of ownership against all or part of a certain property. For example, if a builder did not pay a contractor for the work performed on the construction of the home, the contractor can place a lien against the property.
If you use a professional foreclosure tracking service, this is one of the benefits you will receive. They check for these items and provide you with the information you need to know. It’s something you could theoretically do for yourself. But you cannot beat the convenience and speed offered by these services. It’s how professional investors conduct their research before buying foreclosed property, so you should follow their lead.
This is only a quick introduction to the process of buying foreclosed property in your area. As I stated earlier, it’s probably a good idea to read at least one book on the subject before you proceed. You can also find a lot of great information from the big foreclosure websites, such as RealtyStore, RealtyTrac and others. I hope this article has given you a better understanding of how to buy foreclosed property the right way. If you would like to move forward with the process and start searching for these types of properties, visit the listings page on our blog.
General Buying Tips | admin | 
September 3, 2009 7:00 am