You’ve done some thinking and you’ve decided you want to buy a foreclosure. What now? If you’re a first time home buyer trying to purchase a foreclosure, this will be a very complex purchasing process with a steep learning curve . Even if you’ve previously bought a home, purchasing a foreclosure is different from other forms of home buying. The contracts are more complicated, foreclosures are typically sold as-is, there can be more competition during auction, the condition of the home may be unknown, and there are other variables that you need to be prepared for. If you are considering purchasing a foreclosure, here are some important steps you need to take to make sure you’re ready for this real estate transaction.
What To Do Before Purchasing A Foreclosure
Find A Realtor® Experienced With Foreclosures
Partnering with a Realtor® is always beneficial, but when purchasing a foreclosure it is critical. Foreclosures have complex contracts that need the expert eye of someone who understands not only real estate laws, but also the intricacies of foreclosure contracts, specifically. Before you start looking at foreclosures, make sure you are working with a professional who has experience working with this type of transaction so that you can be assured you’re following all rules while getting a good deal on a quality foreclosure.
Determine Your Budget
It’s best to do this before you start looking at foreclosure listings. You should consider how much you’re willing to spend on the foreclosure upfront as well as how much you are willing to invest in repairs and renovations, as this can vary dramatically depending on the state of the foreclosed home. While you are setting your budget, determine your debt-to-income ratio and discuss this with your Realtor® as this will influence whether or not you get approved for a loan. Discussing your budget before you look at listings will help your Realtor® get a clear picture of what you’re working with and can help them take that into account when looking at foreclosures that may require costly repairs.
Get Pre-Approved For A Mortgage
When purchasing a foreclosure, you need to move fast. Being pre-approved before you put in any offers will give you the best chance of closing on the foreclosure you want. A good credit score can help you get fast approval. Getting approved before you make an offer might also help you set a budget, as you may end up being approved for more or less than you were hoping for, which can alter your foreclosure options.
Get An Inspection
Foreclosures tend to be sold as-is. Because of this, it is smart to hire a professional to conduct an inspection of the foreclosure. You will pay for this inspection out of your own pocket, but it is far better to make this small investment and be aware of needed repairs and renovations than it is to take a gamble and end up with unexpected costs. Sometimes you won’t actually be able to see the foreclosure in person before you purchase, making a professional inspection even more important.
Make An Offer
This sounds easier than it is. If you’re buying a foreclosure, you may need to move fast and outbid other buyers, but whether you get the home at your offered price will depend on the home, who is interested in it, the current real estate market, and more. Partnering with Realtor® who understands foreclosures will help you structure your offer so that you can get a fair deal.
Find Calgary Foreclosures With The Help Of A Realtor®
The Calgary foreclosure market can be difficult to navigate even for some experienced Realtors®. Trying to navigate foreclosures on your own can be nearly impossible and can lead to important aspects of foreclosure purchasing being missed. Get a good foreclosure deal and feel confident in your decision and contract by partnering with a Calgary Realtor® who is highly experienced in foreclosures. The Mel Star team has helped Calgarians purchase thousands of foreclosures and we are the leading foreclosure Realtors® in Calgary. To partner with knowledgeable and reputable Calgary Realtors® who know the intricacies of Calgary foreclosures, speak with the Mel Star team at 1-403-861-9944 or fill out the online contact form.
FAQ
A foreclosure property is a bank-owned home that is for sale. The previous owner was unable to meet their mortgage payments, therefore the bank repossessed the home and is selling it to recuperate the money still owed against the mortgage. To learn more about foreclosures and how to earn a profit from them, read Do Calgary Real Estate Investors Need To Hire a Foreclosure Specialist?
The bank wishes to sell the property as fast as they can to recuperate the lost money from the missed mortgage payments by the previous homeowner. This is often why foreclosure properties are listed for low prices to attract buyers.
Typically there are two types of foreclosures: bank-owned and judicial sales. If you would like to find out more information about how they work and the differences between the two, contact us anytime and read Is It Better to Pursue a Judicial Sale or a Bank-Owned Foreclosure?
CONTACT US
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