Roughly one in every 200 homes will end up in foreclosure at some point during ownership.
Compared to one in an average of 50 homes in 2010, the numbers are looking up. But still, foreclosed homes can be a great investment. The low price of a foreclosed home combined with a little elbow grease and some creativity can create a beautiful home that will attract the right buyer.
If you’re interested in buying foreclosed, but ask yourself how to buy foreclosed homes, this guide is for you. Check out our five easy steps to buying foreclosed homes.
How to Buy Foreclosed Homes: Start With a Budget
Yes, it’s true that you can sometimes buy foreclosed homes for low prices, but if you own a home, have kids, or pay bills, you want to make sure you’re developing a budget to invest in buying foreclosed homes.
Make a realistic budget for yourself, considering all the commitments you already have in place. Talk with people at your bank to figure out what kind of home loan you can take out to buy a foreclosed home.
Make sure you leave consideration for any repairs you may have to do on a foreclosed home. A home loan will help you pay for the foreclosed home, but if you spend too much money on the purchase, you won’t have anything left for any repairs.
Get Preapproved for a Mortgage
It’s not a bad idea to get approved for a mortgage.
Whether it’s with your own bank or another lending company, knowing how much you can spend will help you weed out the houses you shouldn’t bother looking at.
Hire a Real Estate Agent
Unless you’re a real estate agent yourself, you won’t regret hiring one.
Real estate agents are trained to sell houses, and will help you navigate the process of buying a foreclosed home.
On the other hand, if you’re asking yourself, ‘how do I sell my house fast?’ a real estate agent can be a great asset during this stressful time.
Get an Inspection
You’ll never regret getting a home inspection before making a purchasing decision.
Home inspections can help identify problems within a home before you sign on the dotted line. Identifying problems before you own a home can help you make a better decision, and also allow you to examine your budget.
Make a Competitive Offer
Being competitive in your offer is a surefire way to get noticed.
If you’re interested in buying a foreclosed home, consult with your realtor about reasonable but competitive price points. It may take an attempt or two, but being competitive can help you land that foreclosed home.
Foreclosed Homes Can Be a Great Investment
Whether you’re buying for yourself or to flip, foreclosed homes can be a wonderful chance to own a home.
If you’re asking yourself how to buy foreclosed homes, keep our five tips in mind: stick to your budget, have an expert at your back, get preapproved, get a home inspection, and be competitive.