How Do I Work with Banks to Purchase Foreclosed Properties?
After tireless searching, you have finally found a foreclosed property through a bank that you are interested in purchasing. Not so fast! Depending on the property that is being bought, you are better off making certain requests and taking specific actions to ensure that you walk out of the deal in one piece. What you need to remember is that banks will price these homes at a competitive rate in order to make a profit. Here are some things that you will want to go through with the bank before you purchase a foreclosed property.
Property inspection: The property that you are interested in buying may have some deal-breaking flaws that will cause you to turn away. Some of these properties may have been vacant for weeks or months. This means that the property in question may need some serious renovation and fixing before it can be deemed acceptable by your standards. Of course, this will have a direct effect on determining the true market value of the property. Some of these renovations could cost you tens of thousands of extra dollars! Your best bet is to demand your right to an inspection and have a qualified home inspector do the hard work for you. You will know how much the house is worth and what repairs, if any, will cost.
Search for a ti tle: Do not make the assumption that a bank will have cleared a title prior to listing the home for sale. You will want to perform a search through public records for any outstanding taxes or liens that exist on the home. If you really want to make sure that you have done a thorough job, you can hire a title company to run a complete search to pull up this information for you before making the decision to close the deal with the bank.
Financing: If you are going to take a loan on a property, it is important to ensure that you are in good standing to do so. This means that you will want to be pre-approved by the bank that currently owns the property. Things such as your credit history and personal debts should be in order before you apply for a loan.
The most important thing for you to remember about purchasing a foreclosed property (or a real estate owned property, as its called) is that the process can take a few weeks. Remember to be patient and negotiate the best possible price so that you can walk away happy.
What tactics have you used to successfully work with banks to purchase foreclosed properties? Let us know on social!
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