How to Buy Foreclosures Through the Government
Government foreclosures are those on homes or land underwritten and insured through FHA or VA-approved financing. When these homes are foreclosed on, they typically are sold for pennies on the dollar and can be an excellent value. However, purchasing a government foreclosure is not a straightforward process. It is beneficial to home buyers to know the steps in purchasing a government foreclosure before entering into a purchase agreement.
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Instructions
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Hire a Realtor. Services from a buyer's agent are free to you as a home buyer, as Realtors are compensated by the seller on any transaction. Locate a real-estate agent with experience in foreclosure properties. You can do this for free using a service like Homegain.com.
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Review foreclosure properties with your Realtor. Your Realtor should have a complete list of available properties through their local Multiple Listing Service. Visit each property and evaluate its condition. Your Realtor will be able to advise you of some of the deficiencies with the property and help you determine the value of the property.
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Once you have found a property you would like to purchase, write an offer with your Realtor's assistance. Foreclosure properties usually are listed for substantially less than fair market value, so offer a little more than the list price--substantially discounted foreclosure properties probably will attract several bids. The bank will take only the best offer.
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Submit the offer and your financing approval to the bank for review. Expect to wait at least a week for a response from the bank. Then you will know whether or not your offer has been accepted or if the bank has made a counter offer. Once negotiation is complete, you can move forward with the purchase.
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Sign seller addendums from the bank as quickly as possible. Order all home inspections within the allotted time and evaluate those while the lenders are working on getting all required paperwork to closing. Expect the process from contract to closing to take approximately three to four weeks. Once the purchase is closed, you will receive the deed and the keys to the property.
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