There are three different stages at which you can buy a Pensacola foreclosure property:

a. Homebuyers can purchase a Pensacola foreclosure property before a foreclosure auction takes place.

b. Homebuyers can purchase a Pensacola property at the public foreclosure auction.

c. A Pensacola REO property can be purchased from the bank if no one bids at the public sale and the bank repossesses the property.

Once a property is repossessed by a bank or lender, the property will probably be listed for sale through a Pensacola real estate agent, Gulf Coast Home Experts. Before you consider plunging into the Pensacola foreclosure market, without the assistance of a real estate professional, be sure to do some in-depth research.

Here is a list of things you can do to successfully purchase a bank-owned Pensacola REO with Gulf Coast Home Experts: 

1. Inspect the Property.

Most Pensacola foreclosure properties are referred to by investors as "distressed" properties. Pensacola Bank-owned foreclosure homes are usually sold "as is," which means that the 15 percent discount you just saved on the purchase price can easily be eaten up by unforeseen expenses — such as repairs not immediately apparent in an exterior inspection. Many owners of homes that go into foreclosure have been struggling financially, which usually means that the house has not received needed repairs or general maintenance for a while. Some homeowners who lose their property to a lender frequently damage the property. So be prepared to do renovations and repairs. Hire a licensed home inspector to give you a written estimate of the cost to repair the property. Budget that number into your purchase price. Repair costs can be used later in your negotiation with the bank to reduce the asking price. 

2. Title Search.

Once a home has been located, search the public records for liens and outstanding taxes. Best to hire a Pensacola title company to run a full, insured title search before closing the deal. Liens on the property can drive up the purchase price. Common liens typically are placed on a property for unpaid loans borrowed against the property, taxes or unpaid contractors (mechanics liens). These liens remain intact until the money is paid, which means that you may have to pay off the liens on the foreclosed property you are buying — even though you're not the one who didn't pay the property taxes. Banks should clear the title before selling but never assume this is the case — just as you would if you were buying a property from anyone else.

3. Negotiate.

Be prepared to negotiate a lower down payment, a lower interest rate, a reduction in closing costs and a lower asking price. Many lenders may be willing to waive some closing costs, maybe even offer a break on the interest rate or the down payment. Moreover, some lenders might offer to finance the property at a below-market rate or with a lower-than-usual down payment. Don't be afraid to ask for a better price and favorable termsfor a Pensacola REO.

4. The Offer.

Although most banks want to unload their foreclosed properties, they won't necessarily do so cheaply. So you aren't guaranteed a fabulous price. But remember you're dealing with an eager seller. Even though the bank's REO manager or their listing agent might suggest that the list price is "firm," never be afraid to negotiate price — especially if the Pensacola foreclosed bank-owned home needs repairs. When submitting a low offer, you need to substantiate the reduced price in writing and document your case. You should furnish photographs and cost estimates for repairs to support your offer amount.

5. Financing.

With good credit, many banks will loan the full price of the foreclosure or more. If the home is to be used as a rental, many banks will require only a 10 percent down payment. Pensacola foreclosure investors with a large amount of equity in another home may get a line of credit from their bank to purchase a foreclosure. When they convert the line of credit to a mortgage, no down payment may be required.

Contact Cindy 850-393-5134 or Cindy@Move2FLA.com to get additional details on buying Pensacola REO properties with Gulf CoastHome Experts.