How To Buy a Foreclosed House

When homes are selling like hotcakes, you might need to think outside the box and work with the best loan officer Las Vegas and a real estate agent to find a home to buy. One option is a home that is in foreclosure. It is important to understand the differences in purchasing a home that’s in foreclosure compared to purchasing a home that has not reverted to bank ownership.

Lender Pre-approval Is Required

When a house is in foreclosure, ownership reverts to the bank that issued its mortgage. When you want to buy that home, the bank that owns it will require you to have a pre-approval letter from your own lender. You should have this in hand and ready to turn in along with your offer for purchasing the home. With a foreclosure, the owning bank may not accept all types of financing. Most will accept a conventional loan.

Sold in As-is Condition

Houses in foreclosure are sold in as-is condition. Be sure to have a structural engineer or certified home inspector inspect the property so you know what type of condition it is in. The “as-is” part means that the bank will not fix anything. The repairs are up to you to finance. Foreclosed houses might need major repairs from leaks or pests. They may need replacement plumbing, wiring, heating or air conditioning. (Find out more about the documents you need to apply for a home loan.)

Little Room for Negotiation

When you buy a house that is in foreclosure, there is little room for negotiation in the sales price. It is worth doing your research before making an offer. Check out the comps and see what they sold for. If other homes in comparable condition sold for at or more than the asking price of the home you’re considering, bid the asking price. Going under might get your offer rejected.