How to Buy a Foreclosure

Foreclosures are homes and/or properties for which the buyer defaulted on their mortgage. Purchasing these properties are a bit more tricky than buying other properties on the market. For the most part, real estate agents will only recommend these purchases for buyers with excellent credit scores.

How to Buy a Foreclosure:

Step 1: Choose a real estate agent. Although it is advertised on television that you could purchase a foreclosure by acquiring a list of homes, most mortgage companies prefer to deal with a real estate agent instead of a buyer. This is, of course, buyers who require financing. If you have the funds to made a cash purchase, a real estate agent is not necessary.

Step 2: Get pre-qualified for financing. This is as easy as choosing a mortgage company and filing an application. The mortgage company will review your credit reports and evaluate your income. The amount you are qualified for is based on your ability to repay the loan and your past credit history.

Step 3: Select a foreclosure. Your real estate agent will compile a list of homes and/or properties that were foreclosed. This list is based on the loan amount you are pre-qualified to receive. Your real estate agent will take you to each property of interest for you to tour the property and make your selection. Once you have made your selection, you will sign a purchase contract and make a bid on the property.

Step 4: Schedule a property inspection. All properties require inspection before a purchase. This determines if the property is worthy of the asking price. Considering that it is a foreclosure the asking price is usually much less than the properties real value. However, the inspection will reveal any existing problems that requires repair before approval.

Step 5: Close the property. Once the loan is approved following the inspection, your real estate agent will schedule a closing. At this time payment of all closing costs is required. You are informed of your move in date, your mortgage payments including insurance and are given the keys to the property.