Foreclosures can expand your homebuying options, but be aware of potential costs like repairs and extra fees.
The process for buying a foreclosed home varies depending on the current owner and how the house is being sold. These variables can also impact the price you pay when buying a foreclosed home.
If a home is in pre-foreclosure, the homeowner may try for a short sale. Properties that have been foreclosed on generally first go to a municipal auction sometimes known as a sheriff’s sale.
If a home doesn’t sell at auction, it becomes a real-estate owned, or REO, property. These are homes that have been repossessed by banks and mortgage servicers, who sometimes put them on the Multiple Listing Service or offer them for sale on auction websites.
Here are the basic steps of how to buy a foreclosed house.