How to Buy a Foreclosed San Diego Home

When searching for houses online as a buyer, you are likely to come across a foreclosed San Diego home. The price on the listing may seem too good to be true which makes you feel like there’s some kind of a scam at hand. Don’t worry, there’s not. Foreclosed homes are the real deal, but buying one isn’t exactly like a normal San Diego real estate transaction.

What is a foreclosed San Diego home?

A foreclosed San Diego home is a property that is owned by the bank. This happens when the previous owner of the home is unable to continue paying the mortgage.

However, this doesn’t happen immediately the first time a San Diego homeowner is late on a payment. The process starts when a homeowners doesn’t make a payment on time. The lender will contact them to let them know they have defaulted on their loan.

Many times during this period the lender will try to work with the homeowner to get them caught back up on payments. However, most lenders will start the foreclosure process when the homeowner misses additional payments. It’s not a fast process and can often be three to six months before the homeowner has to vacate the San Diego property and the lender takes possession of the house.

The lender wants to sell the San Diego house

Banks are not in the real estate business. They held the mortgage as an investment so they could make money on the interest. When the loan isn’t being paid, they aren’t making money. So, the lender needs to sell the San Diego house.

Many times this begins with an auction where the lender tries to recoup the unpaid portion of the mortgage. If the house doesn’t sell then it becomes an REO, real estate owned, property. This is how it gets to the place that you see it listed when you are searching for a house

What you need to know about buying a foreclosed home

Because a foreclosed San Diego home is bank property you are going to be negotiating with the bank – which is a much different process than negotiating with a homeowner. The bank has no emotional investment in the house. They are strictly looking at the numbers.

The popular trend of writing an emotional plea letter to the homeowner explaining why you want the house and including it in with your offer isn’t going to work here. You have to get to the right price for the lender.

The other big thing that you need to know is that foreclosed San Diego homes are sold “as is.” That means you aren’t going to be able to negotiate with them to have certain things fixed in the house. As a result, you will definitely want to have a home inspection done so you know exactly what you are getting in to.

Purchasing a foreclosed San Diego home is a great way to save money as a buyer. However, you want to make sure you know exactly what to do throughout the process. Look for a real estate agent that specializes in foreclosed property or is at least experienced in working with them. They will be able to guide you through the process.