Buying a home in foreclosure could be a great way to get more home for your dollar. Learn more about how to buy a foreclosure property in this guide.

If you’ve never considered buying a home that’s in foreclosure, you may be shutting down an avenue that can have financial benefits. While a foreclosure sale is like any other home sale in many ways, there are special considerations when you buy a foreclosure property. Let’s take a closer look!

πŸ€” What is a foreclosure?

Life can throw unexpected events in the way of making timely mortgage payments. If a homeowner doesn’t make their mortgage payment for an extended period of time, they may become delinquent enough to default on their loan and start the foreclosure process. It can take three to six months of missed payments before a mortgage company begins to take action.

Common Reasons for Foreclosure

  • Job Loss
  • Divorce
  • Job Transfer
  • Expensive Repairs
  • Excessive Debt
  • Medical Bills
The mortgage lender takes control of the property during the foreclosure process. The owner of the home is asked to leave, and the mortgage company attempts to sell the property to cover as much of the mortgage as possible.
house with foreclosure sign

🏑 Why buy a foreclosure property?

A challenge that many first-time homebuyers face is the need for a substantial down payment. A foreclosure property can be a good option because it may offer some relief when it comes to the necessary budget. Investors purchase homes in foreclosure, renovate them and sell them for profit.

Helpful Tip: Sellers who are facing bank action are motivated to sell their property as quickly as possible. They may be willing to negotiate the terms of the sale and offer credits that drop the asking price below market value. Government agencies and lenders may also offer discounts when you buy a foreclosure property.
Foreclosure Price reduced

πŸ“± Contact Brock Realty Inc.

We can help!
Your real estate agent is the best source of information about the local community and real estate topics. Give Brock Realty a call today at 941-313-1234 to learn more about local areas, discuss selling a house, or tour available homes for sale.

πŸ“‹ Points to Consider

  • Post-sale repairs may add to the cost of the home.
  • Sellers are required to give the history of the property in most cases.
  • Ample time should be given for necessary inspections.
  • The foreclosure sale process can take additional time.
Home buyers doing home repairs

πŸ’΅ What are financing options?

You may be able to get a conventional mortgage loan to finance a foreclosure property if it’s in good condition. In this case, you can expect to need a significant down payment. If you decide to go through an auction for the home, you’ll want to have cash on hand.

It’s not unusual for a foreclosure home to need extensive repairs. If this is the case, you may qualify for an FHA loan that includes the cost of the repairs in the price of the property. The amount of the loan is based on the value of the home after the needed repairs are complete. These loans typically require less of a down payment.

🏦 Foreclosure Types

Short Sale

The home being sold is on the market for less than the balance of the current mortgage during a short sale. Short sales take additional time and require more paperwork, but some homeowners prefer this method if they are trying to limit credit damage.

Government Owned

Some federal agencies sell properties through the foreclosure process. Check with agencies like Fannie Mae, Freddie Mac, FHA, and the VA. Often, the price is below market value, has a lower down payment, and is easier to secure.

Real Estate Owned (REO)

A property that is real estate owned may be held by a bank, government agency, or government loan insurer. This happens most often for homes where the amount owed is higher than the current market value.


The foreclosing lender considers the mortgage loan balance, interest, and additional fees when deciding on an opening bid. If no bids are higher than the opening bid, the property is purchased by the lender’s attorney and becomes an REO property.

⌚ What can I expect buying a foreclosure?

Most homebuyers are anxious to settle the sale and move into their new home, but it’s important to remember that when you buy a foreclosure property you may need to wait a bit longer due to required paperwork.

NOTE: Florida recognizes the Statutory Right of Redemption for homeowners in a foreclosure situation. This means that a homeowner may repurchase their home during a foreclosure sale as long as they do so before the sale is made final.

Purchasing the property through an auction will require a cash down payment and may take several hours to get all the paperwork finalized. You can help make the process smoother by having all the necessary documents ready at the time of the sale.

πŸ‘¨β€πŸ’Ό How can Brock Realty Inc. help?

We’ve touched on some of the basics of buying a foreclosure property, but you may have additional questions before making a decision. Give us a call at 941-313-1234 to get the answers you seek and discuss how we can help make the home buying process easier.

How to Buy a Foreclosure Property
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How to Buy a Foreclosure Property
Buying a home in foreclosure could be a great way to get more home for your dollar. Learn more about how to buy a foreclosure property in this guide.
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Brock Realty Inc
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