How To Purchase Foreclosed Home Safety? Things Must Be Consider!

How to purchase foreclosed home, it is an interesting question. You may think that it is a bad idea. But if you know what to do, this may be the best option to have home in low cost.

As you know, foreclosed home is situated when lender cannot continue payment. And, you as buyer will continue the cost to have thus home. It means you take over lender of home from Bank in paying off the cost.

When it is paying off, Bank will give the land letter based on your name. And, home will be on your hand.

Before you do that, you should consider something. Don’t be trapped for unexpected situation. Because, it will make you regret long life.

Here, we will show you something to consider before buying foreclosed home. We also complete it about how to buy foreclosed home to keep your money safety.

Things To Consider Before Purchasing Foreclosed Home

Purchasing foreclosure home needs consideration. You may think of something to keep it safe. It includes the condition of home, also cost.

Here something that you should consider before deciding to take over the home!

1. Paying attention to home condition

  

So many thing that you should pay attention. It would be the condition of home. Starting from home exterior and interior.

  

You may see the air circulation, wall, floor, and window condition. Even, you need think about location. You may need to know why first homeowner sells thus home.

2. Checking Documents

   

Also consider a number of official documents. This document is in the form of validity regarding home ownership. Usually, this document is still held by the Bank.

  

Paying attention to it is needed. Moreover, this document is important to avoid problems in the future. At the very least, if you find a problematic document, it's better to leave it.

3. Calculate the transaction value carefully

It is assumed you like the house. Then, you have confirmed the legality of the home document. Then, the next thing is to do the calculation of the value of the house transaction.

This includes the sale value of the house itself at this time. In addition, calculate also the amount of the principal debt. Then calculate the remaining credit installments that still need to be paid.

By doing these calculations, you can find out how much money will be spent. At least, you know whether the house is valued more expensive or cheaper.

4. Create a binding letter

Making binding letters of foreclosure home with the seller is very important. This letter is used to guarantee the security of the transaction. At a minimum, the buyer does not experience problems later on.

The example is making a power of attorney. The power of attorney contains the debt repayment letter, as well as a letter for taking the land certificate.

The seller is informed that the house has been borne by the buyer. This notification is informed to the bank. The point is to give the buyer authority to pay off the remaining debt and take the house certificate in the future.

5. Involve three witnesses

In this transaction, you need 3 witnesses to strengthen the purchase transaction. Such purchases involve sellers, banks, and notaries.

If you do not involve the 3 witnesses above, it is feared that there will be problems in the future. This problem can be difficult to retrieve certificates. Even, you are asked to pay the costs back.

Two Ways in Buying Foreclosed Home

Purchasing by the method of taking over from the old debtor to the new debtor is actually very easy. The most important thing is to complete the required documents. After that, the process of taking over the house can be done.

There are two ways that can be applied to purchase the house. You can use one of them. They are as follows.

1. Propose yourself as a new debtor in banking

As a prospective buyer, you are obliged to submit yourself as a new debtor. This submission was made at the banking office. The people involved are the seller, the buyer (you) and the bank.

Here, the bank will verify. When it is approved by the bank, a potential buyer is asked to sign a new agreement. It contained as a new debtor with the name of the old debtor. 

The supplementary documents are the sale and purchase deed and guarantee letter. Both are used to avoid unexpected things that are not desirable.

When the signing is completed, you can continue the payment process according to the provisions. The land certificate is still held by the bank. When the debt is paid, a certificate in your name will be issued.

2.Using the services of a Notary Public

The safest way to take over a house from banks is to use a notary service. The notary will make a power of attorney and a letter of sale and purchase of the house. Of course, it involves the seller and buyer.

This power of attorney is signed by both parties. After that, this letter was notified to the bank. Certainly as proof that prospective new buyers who continue to repay home loans from old debtors.

See: Buying A Big Home Does Not Mean The Best Choice!

Where You Find Foreclosed Home?

So many sources in which inform foreclosed houses. If you want to buy it, you may think of how to purchase foreclosed home above. Then, you may look for the source about it.

There are some sources in which you can use to find thus home. They are newspapers, foreclosure websites, real states agents, mortgage lenders, and government agencies.

You can find it. But you should pay attention to the condition. Also, you may need to inspect all thing about home so that you can feel regret after spending money.

Something that you should avoid when buying foreclosure house is spending plenty of extra cash. It would be used to pay renovation, cover unexpected expenses, cover carrying costs as well.

Finally, it's all your decision. Taking over a house from an old debtor can be very helpful in minimizing payments. The key is accuracy in calculating the value of selling a house. Then you determine how to purchase foreclosed home.

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