6 Tips to Make the Most of Your Real Estate Foreclosures Search

To make the most of your real estate foreclosures search, you'll need to get a Pre-approval letter and a Home inspection. If you're buying at a real estate auction, you'll need to deal with the seller's agent. However, you can still go directly to the listing agent if you're comfortable with dealing with them. The following are 10 tips to make the most of your real estate foreclosures search.

1. Pre-approval letter

When you're in the market for a new home, a pre-approval letter can make all the difference. The majority of sellers insist on pre-approval before showing homes to buyers.

Even though you may not have boatloads of free time, a pre-approval letter will at least help you to know how much you can afford before you start shopping. Also, a pre-approval letter will let you know how much yearly taxes will be.

2. Home inspection

Performing a home inspection for a foreclosure property is important for several reasons. Most home inspections are pre-arranged with the lender. The seller of the foreclosure property pays for it, but there are cases when it is shared. In those cases, the seller may offer to pay the cost of the inspection as part of the closing costs.

In the event that the seller does not wish to cover the cost of the inspection, the buyer may request one prior to listing the property.

3. Dealing with a seller's agent

When buying a property with a foreclosure on it, you should still use a buyer's agent. While this is not required, working with an agent can alleviate some of the stress associated with the process.

After all, foreclosures are not all alike, and each bank has its own timelines and procedures. Your agent should represent your interests only. If there are any areas of concern, ask the seller's agent to disclose them.

4. Buying at a real estate auction

If you're thinking of buying a home during a foreclosure, you may have heard about real estate auctions. These auctions allow you to bid on homes at a reduced price.

But before you bid on a property, you should be aware of the rules. Most auctions require that buyers prequalify and conduct due diligence before bidding. You should also attend a real estate auction armed with the funding to pay the full purchase price. Afterward, you can register with the auctioneer and get a bidder number.

5. Buying at a pre-foreclosure sale

Before attending a real estate foreclosure auction, you need to contact the homeowner. You can mail a postcard or knock on their door to discuss your interests.

Before the auction, make notes about the condition of the property and remember the distressed feelings of the homeowner. Make sure you know what to look for in a foreclosure home, and be patient - it can take months before you see a property you like.

6. Buying a government-owned foreclosure

The government can take possession of a home when the owner defaults on their payments or doesn't pay their taxes. Buying a government-owned foreclosure is no different than buying any other foreclosed home.

First, you need to find a listing of the property you are interested in. Next, you'll want to secure financing. Once you have the financing, it's time to do a home inspection and get an appraisal. If you're interested in purchasing a government-owned foreclosure, make sure you follow all guidelines and regulations set forth by the agency.