According to the Council of Mortgage Lenders, the forecasted number of home repossessions for 2011 and 2012 is estimated at 40,000 to 45,000. Thousands of homeowners are under financial stress and people have no other choice but to give up their property for foreclosure. However, this opens the doors for first-time homeowners and investors in purchasing repossessed houses at affordable prices.
For first-time homeowners, diving head first into purchasing a repossessed home can be very overwhelming. However, there are a few things that can be done to ensure that a prospective homeowner gets their money’s worth. Here are a few tips to remember when purchasing repossessed houses.
Get your finances in order
It is important to know how much you can afford, to avoid going over your budget. Some people purchase a repossessed property just because it is sold at a very low price without even considering if they can afford it. Such a mistake can also send a first-time homeowner into a financial crisis which might also lead to home repossession.
Find a suitable home to purchase
There are thousands of repossessed homes in the market but finding one that is suitable to your physical requirement and financial capability can be tricky. It can be very overwhelming to sort out numerous property listings in search of a home to purchase. Fortunately, buyers can contact a real estate agent to help in the selection process. Real estate agents can give excellent advice regarding repossessed properties and can help protect your assets during the transaction. It is also recommended to compare the price of the property to other similar properties in the area to determine if it is a fair price.
Take time to inspect the property
It should be remembered that the house is sold as is, and since the house was repossessed, most likely, the previous owner did not have the resources for maintaining the house. Factor in the potential repair costs to the total cost of the home to assess if it is still a good buy. Having a surveyor visit the property and assess its structural condition is also recommended.
The buying process
Once a prospective buyer is decided in purchasing a home, he needs to send a notice to offer to the seller or place a bid, if the house is being auctioned off. A real estate attorney or property lawyer can help ensure a smooth transaction, and can also help protect your assets during the process. If the house will be auctioned off, it is also important to take the necessary steps to prepare for the auction. An auction can be very overwhelming for first-time homeowners, thus, it is important to prepare not only financially, but mentally as well.
Purchasing repossessed homes is more than just sifting through a catalog and stumbling across a great bargain. Purchasing a home is probably the biggest purchase anyone will make throughout his lifetime, thus a great deal of time and effort should be invested to ensure that the property is worth every penny.
No related posts.