Have you ever driven by a home with a Foreclosure sign in the front yard and wondered if you could buy one? The main drawback for most prospective buyers will be the lack of available cash because these deals usually don't allow financing. It's Show Me The Money time when it comes to buying a bank-owned foreclosure property, and you will have to produce a Proof of Funds document when your real estate agent submits an offer. This document is usually a bank or brokerage statement—you can black-out the account number.
Bank-owned foreclosure properties are usually ones that failed to sell at auction and are now listed in the MLS. They tend to sell at a discount; some have been rehabbed by the lender, but others might need some major repairs. You won't know until you go inside and take a look.
Foreclosure properties typically stir up a lot of interest, and bidding wars for a property are common. Some things you can do to make your offer the most attractive are:
- Have a home inspection before you make an offer. This removes the inspection contingency, which could allow a potential buyer to cancel their offer if they don't like something in the home inspection report.
- A stated quick closing date (it's in the offer) will help move you to the front of the line.
- Submit an As-Is contract. The lender's probably not planning on making repairs anyway, and this shows your intent to move forward.
- Check public records for city code violations and indicate your knowledge of their existence in the offer and your willingness to negotiate with the city to reduce the fines after the closing. This is another indication that you won't back out after a title search.