Buying a foreclosed home Indianapolis can be exciting as well as overwhelming process. If the foreclosed home is at right location and with the help of real estate agent, you can purchase a foreclosed property.
What are foreclosed homes?
They are REO (Real estate owned) or bank owned properties belong to lender or the bank as the previous borrower failed to make his payments. REO market offers the investors wide variety of home and price ranges. You can avail FHA 203k loan for renovation purpose.
Where do you find foreclosed homes?
Apart from home listing, newspapers and online medium, you need to browse bank and government websites to know the recent REO properties that are available for sale. Moreover, attend public auction to know about these properties which will be advertised along with the venue before a week in newspapers.
There are two types of auctions
- Public foreclosure auction happens when ownership of the property officially transitions to the bank. If unsold, it is listed with real estate agent. Even after marketing for some time, if it remains unsold again, bank transitions the property and moves it to an auction company. These companies sell the properties from different banks and investors by either conducting auction in person or through online.
- Public auction: happens very quickly and you need to be ready with the price to bid. There is no property inspection and you need to decide through photos and description. The auction is good as long as the bidding doesn’t lead to inflated price for a foreclosed home. At that point, refrain from bidding as it will definitely exceed the budget.
How to buying a foreclosed home Indianapolis?
Through real estate agents or public auction, these properties can be bought. They are affordable as well as certain points need to be checked before buying the property.
- First and foremost bank approval is required and you need sufficient amount to finance the property. Mortgage, insurance and property tax should not exceed more than 36 percent of the purchaser’s income. Get pre-qualified so that you increase the chances of buying a foreclosed home Indianapolis.
- Negotiating takes pretty long time than an ordinary real estate purchase as multiple approvals are required.
- In order to sell the property quick, the foreclosed property is priced at market value which is fair and affordable
- Unknown property condition: no record of improper maintenance can be claimed on bank, thus bank is not responsible if property is subjected to bad condition. In that case, hire a qualified home inspector and do a thorough inspection of the home. You need to find the estimation cost of the repair, condition of the home.
- Any unexpected expenses can occur like lender documentation like home appraisal or inspection.
- Title verification is very important.
- Earnest money denotes down payment to be made by the purchaser.
- Before closing the deal, possession date has to be decided.