Advertiser Disclosure

This post may contain affiliate links. We may earn a fee, at no cost to you, if you buy after clicking on the links.

Buying A Foreclosed Home in 3 Simple Steps.

Buying a foreclosed home is probably one of the best financial decisions you can make as a first time home buyer (although it’s not without risk).

In fact, it’s one of the best ways to make a good return on your investment, simply because foreclosed homes usually have more value than a traditional purchase.

However, the process of buying a foreclosed home can be risky and is different than a traditional purchase. Plus, it can be very competitive as other buyers (sometimes real estate investors with a lot of cash) are probably looking for the same opportunity.

If you are interested in comparing the best mortgage rates through LendingTree click here. It’s completely free

So, if you’re thinking of buying a foreclosed home soon, do your due diligence and act fast. And use the following steps below as a guideline.

Related Resources

What is a foreclosure?

Before we get to the steps of buying a foreclosed home, we need to define what a foreclosure is.

Simply stated, a foreclosure is a property where the owner has defaulted on his or her loan payments. It can be other loan requirements, such as not having proper insurance coverage for the property. It can also be keeping the property in a bad condition.


LendingTree: A Better Way to Find A Mortgage

LendingTree.com is making getting a mortgage loan simpler, faster, and more accessible. Compare the best mortgage rates from multiple mortgage lenders all in one place and at the same time. LEARN MORE ON LENDINGTREE.COM >>>


The lender (a bank, credit union, etc…) in the hope of getting some of their money back, takes legal possession of the property. The lender, in turn, will try to sell the house usually at below market.

Buying a foreclosed home in 3 Simple Steps:

If you’re a motivated buyer willing to buy a property in foreclosure, knowing these steps is important in order to buy a house at below market. Here are the 5 steps you need to take when considering buying a foreclosed home.

1. Getting pre-approved for a mortgage.

Buying a regular property requires you to take out a mortgage loan to finance it (unless, of course, you have enough cash to buy the whole property). Buying a foreclosed home is no different. Th same concept applies.

Related: Apply for a Mortgage Loan Today

So before you start looking for a foreclosed home, make sure you can secure a mortgage. You can start doing that by getting pre-approved. The process is not complicated, all you need is to find mortgage lenders. Then compile all necessary documents including your bank statements, pay stubs, or other forms of income.

Your credit score is one of the most important things, mortgage lenders look at to pre-approve you. So make sure your credit score is good.

Having a pre-approval letter can signal to sellers that you’re a serious buyer. It can also signal that you will be able to secure a loan.

2. Start your search: where to find foreclosed properties?

Finding properties in foreclosures can be very easy. Generally, your real estate agent can give you a list of them. You can easily find them listed on popular sites like Zillow, Redfin or Trulia. Better yet, you can drive through any neighborhood, and you will likely see signs that say “bank owned”

Are you interested of buying a foreclosed home? Check out mortgage rates right now.

3. Inspect the property and do a title search.

Once you find the property and make an offer, make sure you hire an inspector to do a thorough inspection to determine the condition of the property and the overall cost of any repairs and renovations the property might need.

So even if you’re likely going to save money by buying a property at below market, don’t try to save money by foregoing a physical inspection on the property.

You should also do a title search to see if the property has any liens, etc.

In conclusion, property in foreclosures are properties where previous owners have failed to meet their loan requirements and the lenders take legal possession of the property. Although they can be risky, they are usually a better value than a traditional purchase.

So, if you’re a potential home buyer willing to do the due diligence to find rare opportunities, you can be significantly rewarded.

Click here to compare mortgage rates through LendingTree. It’s completely FREE.

Related:

Related Resources

Not All Mortgage Lenders Are Created Equally

When it comes to getting a mortgage, rates and fees vary. LendingTree allows you to view and compare multiple mortgage rates from multiple mortgage lenders all in one place and at the same time, so you can choose the best rates for your needs. LendingTree makes getting a loan faster, simpler, and better. Get started today >>>

Article Comments

We invite readers to respond with questions or comments. Comments may be held for moderation and will be published according to our comment policy. Comments are the opinions of their authors; they do not represent the views or opinions of Growth Rapidly. Comments have not been reviewed or approved by any advertiser, nor are they reviewed, approved, or endorsed by our partners. It is not our partner’s responsibility to ensure all posts or questions are answered.

Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like