The U.S. Census Bureau and the Department of Housing and Urban Development announced today that sales of new, single-family homes in August dipped 8.3 percent. Bob Walters, chief economist at Quicken Loans says the drop in home sales is not totally unexpected, given the recent turmoil affecting the mortgage industry.
Buying a home involves several factors, such as the location, type of house, and the size of the property. One decision that homebuyers need to make is to whether they want to purchase a short sale, foreclosure or a regular sale. Each type of sale has its advantages and disadvantages. For example, short sales and foreclosed homes are sold at very low prices but require more work in repairs.
If you’re considering a short sale, read our article “The Short Sale Process Explained in Simple Terms.” This article talks about the process of buying a short sale, as well as the advantages and disadvantages of this type of sale.
If you’re considering a foreclosed home, here’s some information about the steps of buying a foreclosure.
How to Buy A Foreclosure
- Find a home and do an inspection- Things that you have to decide are the location, the size, the type of home, etc. Websites such as Picketreport.com can help you find the perfect neighborhood by looking at factors such as schools, lifestyle, and safety. As you look for a home, keep in mind that when you buy a foreclosure, you’re buying it as-is. So, it’s very important that you inspect the property before you decide to move forward in the process.
- Get Pre-approved- By getting pre-approved, you can get an idea of how much house you can afford. It also lets sellers know that you are a serious prospective buyer.
- Find an experienced agent- Even though foreclosures are increasingly common, it is still important to find an agent that is familiar with the process. If the agent is familiar with the bank who owns the home that you’re interested in, even better! Each bank has a different process on how bank-owned homes are sold and having someone who is knowledgeable on this process is a big plus.
- Find out who owns the home and make an offer! – If the home is in pre-foreclosure (aka short sale) your real estate agent will need to present the offer to the individual who still owns the home. If you’re looking at a home that is about to be sold at an auction, you’ll need to contact the trustee/attorney to ask any questions about the house before the auction. If the house is bank-owned, your agent will present your offer directly to the bank.
Even though getting a response from the owner may take a while, foreclosures can be a great buy if you’re willing to put some elbow grease into it. If you’re purchasing a bank-owned property, it may take several weeks or even months before you hear a response from them. Fortunately, banks are getting better at making the foreclosure sale process more effective and even faster. This is great for the banks because they don’t want to keep empty homes on their balance sheets and it’s great for you because you may be able to find an amazing deal on a house!