Many OnDemand Storage clients are apartment dwellers looking to purchase a piece of real estate in the not-so-distant-future. The vast majority of people purchase a home from a seller who is currently living at the property. However, buying a foreclosed home is a different method, that if done properly, can help you end up with a steal.
Buying a foreclosed home is different than a typical real estate transaction involving two individual sellers, rather the owner of the property is the lender (a bank) who has seized the property. This creates different levels of checks and balances when it comes to negotiating, approving the sale, etc.
How to Buy A Foreclosed home
There are typically two ways one can purchase a foreclosed property either through a real estate agent or through a public auction.
A bank will often set the price of the home low so it can move quickly because in an ideal world the bank does not have to hold onto the property long. Obviously, this creates an opportunity to have instant equity in the property. The downside is that the bank has not been taking care of the property on a regular basis so the condition can be unknown. Sometimes in an auction sale an inspection and walk through are not allowed but they are mandatory in a regular transaction. If you have an appetite for risk and want a chance to make instant money this is definitely a route to explore.
Work with an Expert
To increase your chance of success you should work with a real estate agent that specializes in foreclosures. There is additional paperwork and information you’ll need as a buyer that working with a traditional real estate agent with no foreclosure experience could leave you exposed.
After the home is inspected (if allowed) you can talk with experts to determine the cost of necessary repairs. If you decide to proceed you should look into securing a FHA 203(k) loan covering the purchase price of the home plus renovations.
If you find a foreclosed home and decide to make renovations call OnDemand Storage to store your household goods long or short term. ODS provides convenient pickup, storage, and creates you a virtual unit allowing you to request anything back at anytime via delivery!