Friday, September 29, 2023 / by Ryan De La Uz
3 Tips for Buying Foreclosed Homes in New Jersey
Thinking of buying foreclosed homes in New Jersey? You may find an amazing deal but only when you do the homework properly and equip yourself with extra knowledge.
What is a foreclosure?
A home is referred to as a foreclosed home when the buyer defaults on their mortgage payments. If the buyer fails to make payments for around three to four months, the lender files a foreclosure, forcing the owner to leave the home and gaining possession of the property. The home then can be put up on the mls by the bank.
What is meant by pre-foreclosure and short sales?
When the lender files the paperwork, but the owner still possesses the property, it is referred to as a pre-foreclosure. During this period, the homeowner still has a chance to pay off the debt or even sell the home before it becomes a foreclosed property. The pre-foreclosure process begins when the lender issues a notice of default to the homeowner.
Short sales are referred to the scenario in which a homeowner asks their lenders to accept less than the owed amount for selling the home. This is different from the typical home buying/selling process.
What should you keep in mind when buying foreclosed homes?
If you’re interested in buying foreclosed homes, keep the following points in mind.
- Get an approval letter from a lender
- Work with a skilled realtor in New Jersey
- Learn about the neighborhood and prices of other similar homes in the area
- Evaluate your finances and come up with a suitable budget
Get an approval from your lender
A foreclosed home is owned by a bank, but they may not be the one financing the sale for you. So before buying, you should have a proper financing plan in place. Select a suitable lender who offers you the best interest rates and get a preapproval letter from them before you begin searching for a home in New Jersey.
With this letter in hand, the selling bank will know that you’re serious about buying a home, increasing chances of the deal being closed in your favor.
Ensure that a realtor is by your side
A foreclosed home doesn’t stay on the listing for too long, and generally sells quickly. Get in touch with several agents in New Jersey and hire the one who seems best for the job. Build a relationship with your chosen realtor, and get comfortable with them. Provide them complete information about the budget and the kind of home that you’re looking for.
Realtors can also provide you insights on homes that are about to be foreclosed, which would give you a chance to act quickly.
Get the home inspected
Foreclosed homes that have been vacant for too long or not winterized can incur significant repair costs. So get the property inspected before making a decision.
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