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Buying a house that has been foreclosed is different from your typical resale. It can be dicey. This is because home foreclosures will involve one agent for real estate and the seller needs the mortgage pre-approval letter provided by lending institution before they can accept the offer. Often, there is little room for negotiating and the home is sold in the condition in which it is. This means that the new owner will have to pay for repairs, or roll the cost of that work into a renovation loan like the FHA 203k.
The good thing about buying such a house is that the home is usually vacant and this means that moving in can be sped up. However, it is not easy buying such houses and although the houses come cheap, a person will have to go through many houses before he or she can find the house that you want. About a third of properties that are sold in the US are sold as distresses properties, and these include homes that are under foreclosure and short sales. A short sale is an instance where the home is sold because the owner cannot afford to continue making the monthly payments.
To buy property that is under home foreclosures, the first thing one needs to do is to look for a broker who works with banks that own foreclosed property. Interested people also need to get pre-approval from a lending institution. To search for property potential buyers can go to a website that deals with such property. A local real estate website can also provide such information.
The next step is to know the length of time that it takes for a home that is within your price range. A person compares the prices that are on offer. However, what you need to remember is that the property is sold as it is and sometimes the home may be decrepit. In addition, these homes may stay for a long time without being occupied that they end up in such a pathetic state that are ineligible for mortgages. For this reason it is important that you find out if the home is eligible for a mortgage before you sink your funs in the home foreclosures.
You can learn more about the FHA 203k and foreclosed home purchases with our "FHA 203k Survival Guide" at the button below. The free eBook covers this mortgage option from front to back.
(dice: Flickr user woodleywonderworks)
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