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Steps to Take When Buying a Foreclosure


A foreclosure purchase is a bit more complex than the purchase of a listed property, but a great deal can make the hard work worth it. If your home is going into foreclosure, on the other hand, hire a foreclosure defense lawyer to fight for your rights.

How to Purchase a Foreclosed Property in 5 Easy Steps

Buying a foreclosed property involves these basic steps:

Step 1 – Find Representation

Before you look for foreclosed properties for sale, find an agent with experience. The purchase has several risks you may not be aware of before it is too late. A veteran real estate agent can pinpoint red flags, tell you if the neighborhood’s property values are declining, and locate top-quality bargains.

Step 2 – Get Pre-Approval

The foreclosure market is highly competitive – most investors pay cash upfront, so these properties sell fast. If you cannot pay for one immediately, get financing beforehand. To do that, get pre-approved for a loan. Find out the amount you can borrow beforehand to make an offer.

Step 3 – Shop Around For Foreclosed Properties

Once you know the amount you can offer, shop around for foreclosed properties with your agent. Compare similar options to determine their pros and cons before choosing. This includes the value of homes in the neighborhood.

You can find a listing in local newspapers, REO listings in banks, or on large real estate sites such as Zillow. If you choose the bank option, you will have to wait a bit for a response. This includes a showing to see if the property is worth your investment. A skilled agent will make the process easier and expedite it.

Step 4 – Executing a Sale

Whether you find a foreclosed property at an auction or through referrals from your agent, you must make an offer. Make sure it fits your budget, i.e., the loan amount you were approved for and any additional financing you can arrange.

Your budget should leave room for repairs, renovations, property taxes, closing charges, inspections, and insurance. If you go over budget, you may have to sacrifice some of these aspects, reducing the property value further.

Step 5 – Inspections and Liens

You can arrange an inspection as soon as you finalize an offer. But inspect the property yourself beforehand. Inspections can range anywhere from $400 to $800, depending on the options you pick. For example, you will have to pay more for an in-depth home inspection, including a radon and termite check and sewer and waterline assessment.

It would help if you also resolved liens beforehand. Most foreclosed properties have multiple outstanding loans that belong to different lenders. Hire a title company to sort through these and reveal/resolve conflicts before you get a loan for the purchase. Move towards closing when everything is resolved.

Contact Covert Marrero Covert for a Consultation Today!

If your home is undergoing foreclosure, you can appeal the decision with help from a foreclosure defense lawyer in Illinois from Covert Marrero Covert, LLP. We provide personalized legal services that can ease your stress, frustration, and fear. Don’t go against aggressive adversaries on your own. Contact us for a consultation today by dialing 630-717-2783.

By Brian Covert | Posted | Posted in Foreclosure Defense Lawyer

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