Wondering if buying a foreclosure home is right for you? Learn more about the process in this guide on how to buy a foreclosure property.
Understanding different types of foreclosures and ways of securing financing can take some of the stress out of buying a foreclosure home. Take a look at this guide that helps you understand how to buy a foreclosure property and give us a call with any additional questions.
🤔 What is a foreclosure?
A homeowner who fails to make their mortgage loan payments on time for an extended period can become delinquent enough to default on their mortgage and begin the foreclosure process. Typically, a homeowner can miss between three and six months of payments before the loan company starts the foreclosure.
Common Reasons Foreclosure
- Job Loss
- Excessive Debt
- Job Transfer
- Expensive Repairs
🏡 Why buy a foreclosure property?
First-time buyers may find that homes being sold through foreclosure are perfect because they don’t require a large budget. Some investors use foreclosure properties for renovation projects that can be sold for profit.
📱 Contact The Wilson Group
📋 Points to Consider
- You may need to do post-sale repairs that add to the cost.
- In most cases, sellers are required to give a history of the property.
- You should have ample time to get the necessary inspections.
- Some foreclosures can take additional time to complete the sale process.
💵 What are financing options?
Depending on the condition of the home, you may be able to get traditional mortgage loan financing on a foreclosure property. Expect to have a decent down payment for a conventional loan.
🏦 Foreclosure Types
During a short sale, the home being sold is on the market for less than the balance of the current mortgage. Short sales take more time and require additional paperwork, but some homeowners prefer this method if they are trying to save their credit.
The foreclosing lender considers the mortgage loan balance, interest, and additional fees when deciding on an opening bid. If no bids are higher than the opening bid, the property is purchased by the lender’s attorney and becomes an REO property.
Real Estate Owned (REO)
A property that is real estate owned may be held by a bank, government agency, or government loan insurer. This happens most often for homes where the amount owed is higher than the current market value.
Several federal agencies sell properties through a foreclosure process. Check with agencies like Fannie Mae, Freddie Mac, FHA, and the VA. Often, the price is below market value, has a lower down payment, and is easier to secure.
⌚ What can I expect buying a foreclosure?
Timelines vary when it comes to buying a home in foreclosure. The homeowner maintains some rights to the property until the sale is final in some locations, but it’s important to note that the state of Virginia does not have a statutory right of redemption.
👨💼 How can The Wilson Group help?
We have extensive experience helping buyers just like you with the purchase of foreclosure homes. We handle everything from short sales to conventional mortgage sales. We are here to answer your questions and work on your behalf when it comes to negotiations.
We are a locally owned Real Estate team right here in RVA, and we believe our motto says it all: ALL ABOUT THE EXPERIENCE!!! We strive to make our client’s need to sell or buy a home, or even their property management needs an overall great experience. Our business model is deeply founded in the fact that it is all about the experience!