Foreclosures can end up in either two ways. The first being that you hit the jackpot in deals and get more then what you paid for. The second can be a nightmare with too many repairs or high costs which you were not familiar with. The biggest problem everyone seams to have is how much value they put on the time it takes to sign over on a foreclosure. If you have it then your golden, but if not here are some tips if headed down this path.
Patience is Virtue. The biggest issue people have with foreclosures is the unintentional time it takes for the banks to sign the paperwork. If you are in a hurry to get into your house, buying a foreclosure is not for you. Make sure to allocate a schedule with back up dates if things get backed up. Also, plan ahead to make sure you have a place to stay in the process of closing a foreclosure.
Expect Delays. There is a high chance that something will go wrong when buying a foreclosure. Whether its a wrong deed to the house or unsigned document, one mishandle in the process can take days, to weeks, or possibly months to fix one simple step. Be thorough, quick, and smart with each decision you make or it might cost you a month in a hotel.
Inspection Inspection Inspection. With every foreclosure one must need to have an inspection before closing. The bank may never reveal any mistakes with the home or make necessary repairs from the previous owners. Know what you are getting into when buying a house through a bank. People could not afford to pay their mortgage and were kicked out of their house. Therefore, many people don’t care if they trash it before they leave.
Be Prepared. Make sure that you have everything in order throughout the entire process. Your preapproval letter, down payment money, and earnest money should all be on deck. Even though the bank wants you to be prepared for a smooth transaction, they will most likely run into a problem.
Enhanced Title Insurance. It is recommended when buying a foreclosure to get enhanced title insurance over the standard. If the bank decides to take ownership over the home and build a deck, the advance insurance protects you from any issues such as codes or permits that they could have violated.
Talk to the Neighbors. Meeting your possible new neighbors before closing can help you in many ways. You can discover what the previous family was like living in the house, how they kept with up keeping, noise levels, and if any damages have been repaired.