Looking to get a deal on a home? Buying a home that is under foreclosure can be a great way to do it. However, going through the purchasing process can be quite challenging compared to a normal home. Be aware of the potential challenges you can face, and how to deal with them.
Loan Approval Can Take A While
If you are looking at foreclosed homes, don't make the mistake of waiting until you've found your home to start talking with your mortgage lender. The approval process can take longer for a foreclosure, causing you to potentially lose the home to somebody else. That is why it is so important to work with your lender beforehand. Tell them your intentions of purchasing a foreclosure, get your pre-approval, and put in an offer with confidence that the mortgage will be approved.
Inspections May Not Be Allowed
It is possible that the seller has conditions on the home that must be followed to make the purchase. They know the condition of the home is not the best, since it is a foreclosure, so they may tell you that home is sold as is, with no negotiation for improvements to be made. In fact, they may not even allow you to get a home inspection.
When dealing with a foreclosure, never forego the home inspection. While you should understand that the state of the home is what it is, you still should have the opportunity to look at the home with an inspector to let you know what is wrong. You should always have the option to walk away from the home if the inspection does not come back to your standards.
If a seller refused to let you do an inspection, walk away and find another home. This should be a huge red flag that there is a potential problem they don't want you knowing about.
Information Can Be Hard To Get
Banks often see foreclosures as assets and are looking to sell the home. They'll have no interest in the intricacies of the house, such as how old the HVAC system is, or when the roof was last replaced. Know that getting this type of info can be very difficult when dealing when dealing with a bank. Be prepared to do your own research, or accept that you will not find out the answers to some of your questions.
If you have questions or concerns about buying a foreclosure, ask your realtor.