5 Tips for Purchasing Foreclosure Homes

The foreclosure rate in the Twin Cities area and throughout the nation slowed down for a while following the robo-signing fiasco and subsequent investigation. Now that everything has been sorted out, re-evaluated and the processes have started again, there seems to be indications that the foreclosure rate is on the rise – including in the Twin Cities area. That means more foreclosure homes will be available for purchase.

Thinking of buying a foreclosure home? Here are some tips to keep in mind.

1.     Get preapproved for a mortgage. Getting preapproved for a mortgage ensures that you can act immediately when you find a foreclosure home. Though having preapproval doesn't guarantee anything, not being preapproved could put you at a disadvantage if someone else happens to like the same property you're trying to buy.

2.     Find an agent specializing in foreclosures. If you were a first time home buyer, you'd want to work with a Twin Cities Realtor that specialized in that. Just like if you wanted to buy a high-end home, you would probably find a real estate agent that is an expert in the field. The same idea applies to foreclosure homes.

3.     Budget carefully. The typically low prices of foreclosure homes can tempt you to buy more house than you need. Resist the urge and budget carefully. The person who owned the home previously probably didn't do much or anything to maintain the home once the foreclosure process started, which can take 18 months or more.

4.     See the house firsthand. When you buy a foreclosure home, you're buying it "as is." Because the house may not have been properly maintained for the months or years leading up to your interest in it, you need to view the house yourself before you even consider buying a home. Consider the neighborhood. Look at the yard. Examine the interior. Just like any home you would buy, make sure its a home you'd like in a place you'd want to live.

5.     Get it inspected. After you've decided that it passes your initial inspection, its important that you get it professionally evaluated. Most banks will require that your home pass an inspection anyway in order to officially approve your loan.

Remember the sale is for the home as is and that it's an investment. Purchase a foreclosure home like you would any other home, knowing that it might not be in the greatest shape. It may be tempting to try to buy more house than you need or even try to tackle a fix-up project. If that's you're choice, ensure you have the money for the project and you're positive that its a house worthy of the time and cost.