Purchasing a foreclosure can save you thousands of dollars on your home’s purchase. Having already lost money when the houses’ former owners defaulted on their mortgage loans, creditors price these repossessed properties to sell quickly. You will bid on a house foreclosure in much the exact same manner as you’d make an offer on any home.
Find a mortgage preapproval or bank statements showing that you’ve got sufficient funds to cover a cash buy. A preapproval or evidence of funds demonstrates you’ll have the ability to pay for the house. One or the other needs to accompany your bid.
Hire a real estate agent. Interview several agents, if necessary, to find one who has experience with foreclosures and with whom you will feel comfortable working. You will have a much better chance of closing your sale successfully if the transaction is managed by an expert. Some banks and corporations that own foreclosures require the buyers of the possessions be represented by an agent. Fannie Mae is a fantastic example. The seller’s agent will cover your agent’s commission out of his own after the sale closes, which means you won’t need to pay your agent a commission.
Prepare an agreement of sale to your house where you want to bid. Your agent will guide you through the procedure. The arrangement is a sales contract that outlines the conditions of the buy. A few of the items it comprises are your offer price, the deadlines for inspections, contingencies — requirements that have to be met in order for the sale to proceed — and the anticipated closing date.
Signal the seller’s foreclosure addendum. The addendum becomes part of your agreement of sale. It adds to or changes the initial arrangement. Sometimes the addendum is available before the agreement of sale is filed, and the vendor needs that it be filed with the agreement available. But it is not unusual for the vendor to exhibit the addendum just after it’s accepted a buyer’s offer. In these instances, the buyer must sign and return the addendum before the sale can proceed.
Write a check to your earnest money, or even deposit. “Consideration,” or payment, is required in order for a contract to be legal, and evidence that it is on your agent’s ownership must accompany your offer. Most often, the buyer’s broker holds his deposit before the vendor accepts his offer. Immediately upon approval, the buyer’s agent provides the deposit to the seller’s agent.
Submit the preapproval or proof of money, the sales contract, the foreclosure addendum if open and a copy of your earnest-money check into the vendor through your agent. Your agent will fax the documents to the seller’s agent. The seller’s agent will present the offer to the vendor. This comprehensive offer package comprises your”bid”