Foreclosures are often a good bargain right off the bat, as these homes are often priced below market value. Even before you start negotiating the sale price, the average foreclosed property saves you money because the lender wants to sell the foreclosed home quickly to recover money lost through a defaulted loan. This means great news for you. You can save thousands or tens of thousands of dollars on the property you want to buy. However, there are things you can do to further lower the price of that foreclosed property.
Research is the most important factor if you want to save money from foreclosure. If you want to save money on a foreclosed home, arming yourself with knowledge is essential. When considering a foreclosed home, take a look at the neighborhood, what repair costs you may have to pay on the property, and other factors. Make your own evaluation of the property. Use this information to negotiate a better price on the property.
One way to save more on a foreclosed home is to look for houses that other people don’t want. Lenders often don’t want foreclosures on their books. While foreclosures are great news for buyers, lenders are eager to sell to recover money owed to them by previous owners. You can use this to your advantage. Take a look at properties that lenders have been unable to sell. If one is promising, you can often get a great price on this property because the lender will be even more motivated to sell.
Sweat equity can be another great way to further reduce your foreclosure expenses. Look for houses that need a little work, such as cleaning and painting. Often, a house that needs maintenance has a lower price. If you’re just buying first-time foreclosures, look for homes that only need minor repairs. The hours you spend fixing up the house can add up to substantial savings.
When shopping for foreclosures, remember to look for special programs and benefits that can help you save more money. Often these savings depend on the specific type of foreclosure you are purchasing. If you’re buying a HUD home, for example, you may qualify for a significant discount if you belong to certain professions. You may also qualify for extra help if you are currently in public housing. If you are purchasing VA property, you may qualify for certain benefits generally reserved for members of the military. For example, you may be able to buy your foreclosed home without having to pay for mortgage insurance. If you are buying an REO (real estate property), the lender may consider giving you a favorable interest rate on your new home loan. Understanding the various advantages of foreclosed homes can help you save more, so take some time to consider all of your options.
