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If you’re buying a foreclosed house, you may be wondering whether or not you need a REALTORⓇ. The answer is yes! Buying foreclosures is different and more complex than traditional purchases. Without the right resources and information, buying a foreclosure can become an overwhelming process. A REALTORⓇ can guide you through the transaction and protect your interests.
When purchasing a foreclosed home, you are actually buying the home from a bank or mortgage lender, because the previous owner defaulted on their mortgage. Having a REALTORⓇ throughout this process can be incredibly helpful, particularly if you aren’t familiar with the unique intricacies of foreclosure purchases. Below are three ways a REALTORⓇ can help.
The bank or mortgage lender wants to recover as much of the money they lost as possible. The mortgage lender is not a typical seller, and the process is intended to obtain the highest price while removing the lender from any further liability. The process may be an online auction or a live auction. The lender may be out of state and use completely different documents, designed to protect the lender’s interests and transfer all responsibility to the buyer upon completion of the sale. Buyers unfamiliar with the process put themselves at risk without the guidance of a REALTORⓇ.
How do I prepare my finances to buy a house?
One of the most important reasons to use a REALTORⓇ when buying a foreclosed home is their familiarity with the real estate market. In many cases, the former owner may have tried to sell the home but could not afford to do so either because they owed more than the home was worth or there were defects they could not afford to repair. REALTORSⓇ can help you determine whether a property is worth your investment, and they are familiar with common risks associated with buying a foreclosure.
Buying a foreclosed home may seem like a great deal from a financial perspective. However, without professional representation, you may overlook important information when buying a foreclosed property. A few potential issues that may arise while buying a foreclosed home include:
Competition in purchasing the property
READ MORE: The Dos and Don’ts of Home Buying
The mortgage lender has never lived in the property and, in most cases, has not visited the property. They are unaware and will not be held responsible for any defects. Additionally, the property may have been vacant for an extended period of time and the utilities may have been disconnected, all of which can result in damages. Therefore, inspections are imperative to evaluate the condition of the property. This may require connecting the utilities, which may be the buyer’s expense. Regardless, it takes coordination to remedy such situations.
Typically, the buyer will purchase the property ‘as is’ because the lender will not make any repairs or pay for them. Different financial institutions manage the inspection process differently, and a REALTORⓇ will help you navigate the process.
Buying a home from an individual is vastly different than purchasing one from a bank or lender. A REALTORⓇ guides you through the steps and alerts you to the risks and pitfalls. There are buyers who specialize in foreclosure purchases, and you will be competing against them to complete a purchase. They may be willing to take greater risks and spend more money purchasing and repairing the property. This makes the importance of guidance by a REALTORⓇ even more crucial.
Why not let a professional at Marx-Bensdorf REALTORSⓇ, guide you through the entire homebuying experience? Our agents have years of experience and would welcome the opportunity to be of service to you.
If you are looking for a REALTORⓇ to assist you in your journey to purchasing a foreclosed home, contact our office today to find an agent custom-suited to your needs.