4 Most Commonly Asked Questions About Buying a Foreclosed Home

This includes ensuring that you: 

• Have no debt 
• Can afford a down payment of at least 10-20% for a 15-year fixed-rate mortgage 
• Have factored into your budget any additional costs that may be required for repairs or renovations 
• Have an emergency fund of 3-6 months expenses 
• Work with a real estate agent who specializes in foreclosures 
• Invest in a home inspection
• Determine if there are any outstanding liens on the property 

First-time home buyers are often attracted to the idea of purchasing a foreclosed home because of the low price, and it may provide you with an opportunity to get a bigger house than you could otherwise afford. However, before you do this, it’s important that you fully understand the process and what differentiates a foreclosed home from other properties. 

Our Calgary Realtors Have the Experience to Help You Get the Best Deal on Your New Home

Do you want to buy a foreclosed home, but you don’t know where to start? Are you having difficulty negotiating a price for your new home? With the Mel Star Team, our top Calgary realtors can take care of all these details so you can focus on what matters most: finding a dream home for your family at a great value.

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4 Common Questions About Buying a Foreclosed Home 

If done correctly, purchasing a foreclosed home can be a wise real estate investment that will provide you with an excellent rate of return. However, before you take this step, it’s essential that you fully understand all of the aspects and procedures involved in buying one of these distressed homes. 

Here are four of the most commonly asked questions about buying a foreclosed home that you should know to ensure that you are better prepared to start investing in a well planned, high rate achieving venture: 

1. Can I Get a Mortgage on a Foreclosed Home? 

Yes, you can! In many cases, purchasing a foreclosed home is an investment rather than a first home, so the chances are that you might already have a pre-existing mortgage. If you don’t, working with a real estate agent can make the process of getting a mortgage easier, so you can start searching for your first investment property. 

However, before you get a mortgage and purchase a foreclosed home, ask yourself: 

• Can you afford it?
• What is the maximum amount that you are willing to offer for the foreclosure sale? Remember to calculate all the extra expenses needed for repairs, maintenance, and renovations. 
• How can you find the lowest mortgage rate possible? The difference between a few percentage points will save you a great deal of money over the years. 

4 PRECAUTIONARY STEPS TO TAKE BEFORE BUYING A FORECLOSURE 

2. What Should I Look for Before Buying a Foreclosed Home? 

While it’s true that buying a foreclosed home can be a sound real estate investment, and a great way for you to generate revenue, there are some factors that you will want to consider before making the purchase. 

Remember, foreclosed homes have sat vacant for months, and in some cases, years, and this can lead to maintenance issues. Getting a home inspection is crucial as it will help you understand the total cost of maintenance that will be needed in your new investment. 

A home inspection will give you a report on: 

• Any plumbing or electrical problems the house might have
• Any structural issues, such as cracks in the foundation or the condition of the roof 
• The condition of the main appliances, such as the water heater or furnace 

A home inspection will give you a broader picture of what the overall cost of buying the home will be and whether it’s a great investment or a money pit that you should walk away from. 

3. What Expenses Will I Have When Buying a Foreclosed Home? 

Before you purchase a foreclosed home, you must fully understand all the costs that you will encounter during this journey. Some of the hidden costs that might be associated with a foreclosure sale include: 

• Professional cleaning
• Changing the locks and rekeying your home 
• Any damages or costs that may have occurred from the time you viewed the home to the date you take possession 
• Renovations — including fixing any plumbing or electrical problems, as well as replacing or repairing old/damaged appliances

Importance of Working With a Realtor 

When you are buying a foreclosed home, working with an experienced realtor is a must. Their knowledge and advice will help you avoid some of the common mistakes and pitfalls that are so often associated with purchasing such a property. 

WHY IT’S ALWAYS BEST TO WORK WITH A REALTOR WHEN BUYING A HOME

4. When Can I Buy a House After a Foreclosure? 

As soon as a foreclosed home goes on the market, you can purchase it! Working with a realtor means that they can check the daily foreclosure listings for you so that you can be the first person to view these properties and their revenue potential.

While you can make an offer at any stage of the foreclosure process, it is highly recommended that you wait until the previous owners have moved out. This way, you can avoid incurring any costs that may be associated with damages that may occur to the property after you have made the offer. 

Patience May Be Required 

It’s important to remember that the longer a foreclosure sits on the market, the less money the bank is willing to take for that property. This means that sometimes, patience is key to saving a lot of money! Working closely with your realtor will help you gain a greater understanding of your local foreclosure market, and when the best time would be for you to invest in this market. 

Contact Us 

Although you can represent yourself when buying a foreclosed home, hiring an experienced realtor will ensure that you are protected and it will save you a lot of frustration, time, and money. Finding the right foreclosed home can be a challenge, but with our Calgary realtors in your corner, it doesn’t have to be. 

To find out more about how we can help you find a foreclosed home at the best price, contact us at (403) 284-6333 or fill in our online contact form.