Buying a Foreclosed Home: How to Get the Best Deal

Buying a foreclosed home can mean a great deal of savings to you. Learn how to barter the best price, so you can land a dream home for much less than you would have thought.

Make a list of repairs

When people know their home is going to go into foreclosure, they often neglect the needed repairs it needs in order to sell well. After all, the bank and lenders are the ones who are going to make a profit, not the previous owner.

Before buying any foreclosed home, walk through the property and make a list of all needed repairs. Check the fencing, landscape, roof, bathroom and kitchen fixtures, plumbing, water heater and furnace, and windows, and make note of the restoration that is required in order to make the home comfortably livable.

If you can, take pictures of any noticeable damage, which can come in handy when it comes to negotiating a final price.

Get an estimate for repairs

Contact a trusted construction expert and get an estimate on how much it will cost to restore the windows, foundation, and the roof to a like-new or at least selling condition. Allow a landscaper to give you an estimate on outdoor remodeling as well. These estimates can be brought to the table when it comes to finalizing a fair price for the foreclosed home, since you as a buyer will have to invest a certain amount of funds in order to make the home habitable.

Since the bank or lender who now owns the home will want to sell it fast, they will be more likely to meet you in a lower price if you can prove the house is in need of restoring prior to moving in.

Have a large down payment

It's a great idea to have a large down payment when buying a foreclosed home, since the goal of its cheaper rate is to sell it fast. Most homes require a 3-5% down payment, but foreclosures often sell faster if you can provide 30% or higher funds upfront. You can secure a Rehabilitation Loan, which allows you to gain excess funds in order to clean and restore your new home to great condition. Talk to your lender and see just which type of loan or down payment will work best for you.

Buying a foreclosed home often requires a lot of negotiation if it requires ample cleaning and restoration; for those needs, professionals like Steamatic of South Jersey would be a major help. But this can also mean you can land a better rate. Use these tips to secure the best deal on your new home, so you can afford to buy a great house that you can renovate yourself for less than you would pay if you were buying the same home in pristine condition.