- 1). Get preapproved for a home loan. Once you have obtained financing, you will know exactly how much you can (or cannot) afford, allowing you to act quickly when you find a property that interests you. The foreclosure deals that offer the most savings to a buyer will sell quickly, so having a recent preapproval letter from a lender is highly beneficial and may aid in expediting the next step.
- 2). Find a real estate agent who specializes in distressed properties and is well-versed in the process for purchasing a foreclosure. Banks often hire one or more agents to handle their REO properties, and these Realtors know the foreclosure listings and may even have knowledge of properties not yet listed. With the millions of foreclosures taking place all over the United States, many real estate agents are overloaded with properties to sell. To get more personalized service from an agent, present the lender's preapproval letter to prove you are serious about buying.
- 3). Investigate how quickly foreclosures in your price bracket are selling. If the homes in your price bracket are selling within a day or less, it would be advantageous to come up with your best and highest offer for a purchase price right from the beginning.
- 4). Locate a property of interest and familiarize yourself with the selling prices of comparable homes in the area. On websites such as RealtyTrac.com, you can track foreclosure properties to find one you would be interested in purchasing. Once you find a property, you can use RealtyTrac to get more details about it such as the address, owner, lender, unpaid loan balance estimate, approximate property market values and the recording date of the foreclosure.
- 5). Prepare and make an offer keeping in mind that purchasing a foreclosure usually means the property is being sold "as is." Generally, with a foreclosure property there is no inspection allowed before buying it, and you probably will not be able to deduct the cost of any necessary repairs from the purchase price. Experts recommend contacting a contractor or property inspector who can assess and repair damage from leaks, mold and pests.
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