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Everyone appreciates a good bargain. Purchasing a foreclosed home enables you to secure a great deal on a home in a way that’s less traditional than a regular listing, but equally as effective. The bottom line is that a foreclosed home is cheaper, which means it’s more affordable and offers a greater chance for individuals with limited financial resources to afford a property. Below are more details about the process of buying a foreclosed home.

Hiring a Knowledgeable Agent

A home becomes a foreclosure when the owner has defaulted on the mortgage and the lender takes the property back. The bank endeavors to minimize their loss by selling the property. The price is usually for less that its value. If you’re interested in buying a foreclosure, you should work with a realtor that’s familiar with the market and has experience helping buyers obtain distressed properties.

There are professionals with specialized knowledge that possess the Certified Distressed Property Expert designation. You can also work with someone that has the Sales and Foreclosure Resource credential.

Getting Pre-approved

There are few potential buyers that can afford to pay cash for a home. When buying a foreclosure, it’s best to get preapproved because you will be taken more seriously when you have a preapproval letter. The letter will indicate how much you’re eligible to borrow, which is typically a function of your income, employment, and credit score.

Looking at Comparable Properties

Prior to making an offer on a property, you’ll want to look at comparable homes. Your real estate agent will help you with this process. Your analysis should include a look at similar properties in the area, the price for which they have sold, the history of the neighborhood, and tax information. These are all factors that will be an important part of your decision.

Once you have hired a real estate agent, obtained a pre-approval, and analyzed the market, the next steps will involve placing a bid. Just keep in mind that the property is likely sold “as is,” which means you will probably need to make repairs. Your real estate agent will walk you through the home buying process, so be sure to ask plenty of questions.