Finding the perfect home can be a challenge if you’re working with a modest budget. But you can get a great home at a great price when you purchase foreclosed properties especially Knoxville foreclosures. Here are some crucial things you need to know when buying a foreclosure home:
Judicial vs. non-judicial foreclosure sales
In other states, a mortgage lender has to bring the homeowner to court so that the property can be legally deemed foreclosed; only then can it be put up for sale. In Tennessee, however, this isn’t necessary – as long as the deed of trust contains “power of sale language,” the lender can put the foreclosed house on the market directly.
If it doesn’t, though, the lender needs to seek judicial foreclosure first. Thus, ask if a foreclosed home is cleared for selling – otherwise, you might find yourself buying a legally contested property.
Timing is everything
It takes as little as 90 days for Knoxville foreclosures to sell at a public auction. At this stage, the lender will try to sell the property to the highest possible bidder, and it typically won’t accept a bid that’s lower than the home’s original mortgage amount. But if the public auction closes without a bidder, it might decide to drop the price just to get that house off its balance sheet. And this is where the smart investor can snag great deals on foreclosed homes.
Inspect the home!
Never buy a home without having a professional inspection first. This is important because foreclosures are sell as-is, warts and all. An inspection can reveal if a property has any deal-breaking damage or defect that should turn you away. After all, you don’t want to spend a fortune on your home purchase, only to break the bank for repairs. Don’t forget a termite inspection is very important especially in Knoxville where termites are very common.
Have a pre-approval letter
As you can see, the foreclosure process can start and end in a matter of weeks. This means that you have a narrower purchase window, which is why having a pre-approval letter comes in handy. Basically, a pre-approval letter signifies just how much a bank is willing to loan you.
Since many people want to score a great on foreclosed homes, a foreclosure letter gives you a crucial edge – if you decide to buy the house, you could get financing for it stat, whereas others still need to work out a deal with mortgage lenders first.
Look at the area, too
When you are looking at Knoxville foreclosures don’t just look at the house – do your due diligence on the neighborhood, too. Even if you snag a home at a rock bottom price, its value might not increase over time if it’s in a bad neighborhood. Also, homes in depressed areas are often in some state of disrepair. This means you’ll also need to spend more money to rehabilitate the property.
A foreclosed home can give you great value for your money, but it requires a lot of know-how to get a good deal. If you need expert advice, don’t hesitate to contact Frank Goswitz at 865-588-1234 or e-mail him at firstname.lastname@example.org.