What are the risks and rewards of buying a foreclosed home? Find a real estate agent in Washington, D.C. who specializes in this type of transaction. Learn how to purchase a foreclosed home and what actions you should take if you have time.
Are you trying to find a foreclosed home to purchase in Washington, D.C.? You may have a difficult time doing so. Only one out of 3,583 homeowners in Washington, D.C. have gone through a home foreclosure in 2019. The national average of home foreclosures is 0.04%, and the District of Columbia averages 0.03%.
If you think buying a foreclosed upon house is your only chance of being able to afford a home in Washington, D.C.’s elite neighborhoods, reach out to a Clever Partner Agent serving that area. Real estate agents often have their ears to the ground, and they know properties that will soon be available, sometimes even faster than the homeowner’s neighbors do.
How do you buy a foreclosed property? Purchasing foreclosure properties is like buying any home in a hot market. Here are the steps.
Work with a Clever Partner Agent to navigate the process.
Get Your Loan Ready
Foreclosure properties go quickly. You don’t want to be left sputtering when your dream home comes available in an ideal neighborhood.
Get pre-approved for a loan. This process will take days or weeks to complete. The lending institution will go through your finances with a fine-tooth comb and will check your income.
To be clear, being pre-approved for a loan differs greatly from being pre-qualified. If you are pre-approved, your loan provider will give you a pre-approval letter to attach to any offer you make so the homeowner (or bank with a foreclosure), knows you mean business.
Contact a Clever Partner Agent
It is always essential to work with a qualified real estate agent when purchasing a home, but it is important to work with someone who understands the business when you are trying to buy a foreclosure property.
Not only will your agent tell you when properties become available, but they also know the right questions to ask regarding the condition of the property.
Sure, you expect to complete renovations on a foreclosure, but you need to make sure that the house is not in such disrepair it may jeopardize your loan. Mortgage companies aren’t super keen on loaning money for a home is in shambles.
If You Have Time, Hire a Home Inspector
When buying a regular property, it is reasonable to make your offer contingent upon the inspection of the home, but if you are trying to buy a foreclosure, the lending institution may not accept any offers with contingencies. Lending institutions assume that you are okay with purchasing a foreclosed upon house “as is.”
That doesn’t mean you should not attempt to have the house inspected quickly before putting out an offer. There are a lot of things that could go wrong with an older D.C. area home.
As you tour the property with a home inspector that your agent recommends, you may encounter crumbling exterior bricks, water damage from windows not sealing well because of age, outdated electrical outlets, and flooded basements caused from clay soil and frequent downpours.
Alone, these possible issues are nothing to ignore, but foreclosed upon homes may have other problems. It only makes sense that if homeowners are struggling financially, they also don’t have enough money for paying to upkeep their houses.
Your realtor should also help you look for clues you may be buying a money trap. Your buyer’s agent is working on your behalf, and even though there may not be much room for negotiations when purchasing a foreclosure, your real estate agent still wants to work hard for you, so you have a positive home-buying experience.
If You Have Time, Do a Title Check
If the homeowner didn’t have money for house payments or repairs on a foreclosed property, he might not have had the resources to pay taxes. Make sure the U.S. government doesn’t have a lien on the property for unpaid taxes. You don’t want a surprise tax bill from Uncle Sam after purchasing a foreclosed-upon home.
Take a Deep Breath and Make an Offer
Most of the time, you will not have time to have an inspector view the house or to check a property’s title. Sometimes a foreclosed-upon-property goes up on the auction block, and it is sold to the highest bidder.
When you are bidding on a house, you need to have the right person in your corner. Your agent should be able to assist you in knowing how much to offer. While you may need to do some legwork to figure out the approximate cost for renovations, your realtor should be able to tell you what the home will be worth when everything is fixed.
You are taking more of a risk when buying a house on the auction block, but you can get some great deals.
To help you with this risky and stressful process, connect with a Clever Partner Agent in the Washington, D.C. area. Your agent may help you obtain a rebate of $1,000 when you purchase a home over $150,000 or up to 1% on homes over $500,000.
Let us help you find a great deal on a foreclosed house today.