Seeking out foreclosures is an increasingly popular method of finding affordable homes. Investing in these properties offers buyers several unique opportunities and benefits. However, purchasing such a house can be challenging, so it’s best to consult a lawyer who understands how these types of transactions work. In the meantime, here are a few of the different ways to buy homes in the stages of foreclosure.

Different Ways to Buy Foreclosure Homes

1. Homeowner

If you know a homeowner who is facing foreclosure, there is potential to buy their property without involving third parties. To purchase that house directly, you would give the owner cash in exchange for whatever equity has been built up. You would then be responsible for paying any liens or outstanding debts attached to the property. Before finalizing a deal, have a lawyer carefully investigate these aspects and draft the purchase agreement. 

2. Auction 

You may also buy a foreclosed property at an auction. It takes place when the lender recovers possession of the home and decides to sell it this way to the public. The house will go to the highest bidder who can pay cash at the time of purchase. Often, buyers don’t have the chance to inspect the property beforehand and must assume any risks of damages, unpaid property taxes, and junior liens. If you are considering this option, ask a lawyer to conduct a full title search on the property and research its condition as much as possible. 

3. Bank & Lender 

It’s not uncommon for mortgage lenders to end up with ownership of a home after a foreclosure auction. Typically, the bank will pay off whatever outstanding debts the former owner had, so they may resell the property with a clear title. Banks have the flexibility to negotiate on the sale price, down payment, interest rate, and closing costs. They usually want to make a quick sale, so they don’t have to deal with maintenance and security. 

If you are interested in buying a foreclosure home, hiring a lawyer is one of the first steps you should take. Bernardini Law P.C. in North Andover, MA, will protect your interests and carefully guide you through the purchasing process. They have extensive knowledge of the different legal issues foreclosed properties present, as well as experience providing effective solutions. Call (978) 794-5525 to schedule a consultation, or visit the website to learn more about how they can assist.