In many cases buying a foreclosed home is no different from buying any other home. Many holders of repossessed homes list them with real estate brokers and negotiate sales contracts just like other sellers. In fact, you may not even know that the home has been foreclosed until you find out who the seller is.
However, when holders sell their own inventory of the transaction may be quite different. Generally, these differences are in the way the property is advertised, the way purchase bids are handled and also in the way sales contracts are negotiated. In addition to these points of difference many holders will sell their foreclosed properties at auction.
There are special lists and computer printouts you can obtain that offer information on the entire inventory of foreclosed properties in your area. Differing from purchasing a regular home when buying a foreclosed home found on one of these lists there is generally a special procedure required when inspecting the home before submitting a bid. Oftentimes these inspections must be supervised by local agents who work for the holder of the foreclosed home.
When bidding on a foreclosed home in many cases, you will need to finance before making a bid, unlike when purchasing a regular home, because there is often not a provision for financing contingencies and foreclosed home contracts. In addition, when buying a foreclosed home at auction you as a bidder are expected to complete the purchase it is awarded to you and should expect to forfeit any deposit and possibly incur further monetary loss if you cannot do so.
In addition with foreclosed homes even if the lender offers financing or you are eligible for financing through third-party cash buyers will always receive priority. This is due largely to the fact that the home has already been foreclosed upon and the current holder is looking to ensure that the home is gotten rid of for guaranteed cash whenever possible.
Hopefully now you understand some of the many differences between purchasing a home and purchasing a foreclosed home. While you may be able to get a significantly better deal when purchasing a foreclosed home it is important to understand some of the many differences in the bidding and buying process to ensure that you do not meet any of the standard pitfalls which are often present with the difference in the sales process when purchasing a foreclosed home.
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