- Understand that the process for buying a foreclosure in California is different.
In traditional real estate transactions, homebuyers work directly with the property sellers and their agents. Homebuyers will typically present an offer directly to the seller and their agents to purchase the property.
When homebuyers are buying a foreclosure in California, they are not dealing with a traditional seller. Foreclosures are properties that have been repossessed by a bank or other organization. These companies now own the property and are the entities that homebuyers will be interacting with when making an offer.
- Work with real estate agents who have foreclosure experience in California.
It is extremely helpful to have an agent who is familiar with buying a foreclosure in California and has experience closing foreclosure deals. An agent who has experience with foreclosures is an invaluable resource for finding foreclosed properties, evaluating price, and navigating the buying process expeditiously. Foreclosed properties are not the same as a typical real estate transaction and having an expert on the homebuyer’s side can make a huge difference.
- Get pre-approved early.
If homebuyers are planning to use borrowed funds when buying a foreclosure in California, they will need to get a loan to cover the difference in their purchase funds. Getting pre-approved is important for homebuyers to determine what they are actually comfortable paying each month in a mortgage payment, and what price range they should be shopping for. Foreclosure properties also tend to move quickly on the market. Having a pre-approval letter from a local and reputable lender will make homebuyer’s offers much stronger.
- Do market research.
Foreclosure properties usually go quickly on the market because they tend to be priced below market value. Homebuyers should be prepared to purchase a property that they like quickly.
Market research is important because it gives homebuyers a sense of what prices similar properties have been selling at, and helps homebuyers spot a good deal on the market.
- Utilize real estate websites and REO searches.
Nearly all of the major real estate listing sites have foreclosure properties listed. Foreclosures are usually listed online under the category REO (real estate owned) property. REO is used to categorize properties that have been repossessed by banks, government agencies, or other companies.
Starting the foreclosure search by researching listings on multiple sites is a good way to monitor all desired locations for a foreclosure deal.
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