How to Buy a Foreclosed Home in Pennsylvania

Ben Mizes


Ben Mizes

October 21st, 2021
Updated October 21st, 2021


Buying a foreclosed home may seem like a great solution for home buyers looking to save money on the purchase of a property. For new home buyers unfamiliar with the process, there are many steps to be considered. Here is what home buyers need to know about buying a foreclosed home in Pennsylvania.

How to Buy a Foreclosed Home in Pennsylvania

For home buyers, a foreclosed home may be the easiest way to getting a deep discount on a new home. Still, there is also a great deal of risk that comes with purchasing a foreclosed property.

You need to know about the laws of Pennsylvania, which is why working with a knowledgeable “real will help you navigate the pros and cons of buying a foreclosed home. Here are some things home buyers must know before they buy a foreclosed home in Pennsylvania.

What Is a Foreclosed Property?

A foreclosed property is one that turns over to the lender after the previous owner defaults on the mortgage. Since the previous owner failed to make the necessary payments on the mortgage, the lender may attempt to recover the remaining loan balance by selling the property at a much lower price.

In Pennsylvania, the foreclosure process goes through the courts in litigation as part of a judicial foreclosure process.

The Pros and Cons of Purchasing Foreclosed Property

While the typically low cost of foreclosed properties may make purchasing a foreclosed home seem like a good option, there are also some risks associated with purchasing a foreclosed property. Many foreclosed homes are offered in “as is” condition, meaning the purchasers are buying a property with no information regarding repair history, damages, or infestations.

Here are a few of the potential pros and cons of buying a foreclosed home.

Pros: Typically Low Purchase Costs

Foreclosed properties tend to be cheaper than comparable properties that are not foreclosures. When you purchase a foreclosed property, you are paying less for a home in "as is" condition that may not have any property disclosures. Home buyers purchasing a foreclosed property must be sure to do their research on the property, the area, and general home repairs.

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Cons: Assuming Potential Risks

The “as is” condition that foreclosed properties are sold in may present buyers with numerous potential risks. Because they are sold “as is,” foreclosed properties may not have the property disclosures that non-foreclosed properties on the market may be required to have. These risks may include property damage, repairs, crimes, and even structural damage.

Cons: The Surrounding Area

Many foreclosed properties may not be located in desirable areas. Foreclosed properties in areas with less crime and better school districts may be acquired sooner than properties in less desirable areas.

However, properties in more desirable areas may be subject to higher property taxes and a higher cost of living. When purchasing a foreclosed home, it is important for home buyers to research the surrounding area.

Cons: Unpaid Property Taxes

Buyers looking to purchase foreclosed homes as investment properties must do their research on what unpaid property taxes may be owed. That is why it is important for new investors to work with an experienced real estate agent to recommend title companies that will thoroughly research the title to the property and ensure the buyer is not liable for any past issues.

Steps for Foreclosure Investors and Home Buyers in Pennsylvania

Search for Properties

Finding foreclosed properties in Pennsylvania may be as simple as searching public real estate websites. Buyers and investors may also find opportunities to buy foreclosed properties at a public foreclosure auction sale. Working with an experienced real estate agent who sells foreclosed properties can also benefit buyers and investors searching for foreclosed properties.

Find a Lender

If the buyer is unable to purchase the property in cash, the next step is to find a lender. Finding a lender may be as easy as searching online at websites such as Bankrate. Those having trouble finding a lender may also consult the Pennsylvania Department of Banking.

Make an Offer

Once a buyer obtains funding, they may make an offer on the foreclosed property. If the homeowner still occupies the property, the lender may agree to a short sale, which is an amount less than the principal balance of the mortgage.

For bank-owned properties, a written offer is made to the lender. Foreclosed properties in Pennsylvania are also available at a public foreclosure auction or sheriff’s sale, which usually occurs two to four months after the foreclosure is finalized.

Home Inspection and Closing

Buyers must consider having a home inspection completed to make sure there are no serious issues with the property. Buyers opting for a home inspection are required by Pennsylvania law to have the home inspected by a member of the National Home Inspection Association. The home inspection then determines if there are any serious physical issues with the property.

Once a buyer is satisfied with the results of the home inspection, they will attend a closing meeting with their realtor and the title company to transfer the title into the buyer’s name. Lenders are required by Pennsylvania law to run a title search on the property to ensure that it is free of any other burdens that may jeopardize the transfer of ownership to the buyer.

A Clever Partner Agent may help the buyer navigate the purchase process and recommend a lender who will complete this process smoothly. With years of experience and the real estate acumen needed to navigate the foreclosure purchase process, our agents will ensure that buying a foreclosed home in Pennsylvania is a sound investment for you.

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