Buy foreclosed property to save on the purchase price.
The economic crisis in 2010 and 2011 left many homeowners struggling to make the monthly mortgage payment. Banks and finance companies were forced to foreclose on thousands of properties throughout Florida. As of 2011, Florida does not offer redemption on foreclosures, which means if you buy a foreclosed home, the previous owner has lost all claim to the property. You can tour a foreclosed property to determine needed repairs prior to making an offer, but the properties are offered in as-is condition. Foreclosures go up for auction or may be listed with a national or local real estate brokerage firm.
Instructions
1. Locate a property through the Real Estate Owned (REO) list of your local real estate office. Your local real estate agent can access the list of foreclosed HUD and Veteran's Administration homes for a larger selection of properties.
2. Tour the property to check location, amenities and condition of property. Set up an appointment for your contractor to examine the property. He can tell you about the foundation, roof and structural stability.
3. Request the tax information so you know how the property is being appraised, whether as a standard real estate property or homestead exempt. Calculate the taxes with the asking price to get a close estimate of the mortgage payments.
4. Bid at least two-thirds of the asking price and present a percentage of the down payment as earnest money with the real estate sales agreement. Include any requests you may have, such as a price reduction for structural repairs, in the purchase offer. The real estate agent will present your offer to the bank or finance company. You may be asked for your pre-approval letter, also.
5. Produce the remainder of the down payment upon acceptance of your purchase offer and schedule a termite inspection or other inspection your local building department may require.
Tips Warnings
Your first offer may be declined if it is too low, but you can submit a higher bid.
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