Buying foreclosed homes that are occupied - will eviction be necessary? If so, you need a real estate attorney to help.

shutterstock_94996510As a real estate investor or home buyer, you may consider buying foreclosed homes that are currently occupied. As with any business transaction, the more research you do and the more you know, the fewer problems you will have.

Before looking at foreclosed houses to buy, you’ll probably want to get pre-approved for a mortgage. A pre-approval letter can help you buy more quickly once you find a house you like and help you determine how much money you can borrow. Plus, you may be required to furnish the pre-approval letter with your home offer. This is the case with most real-estate-owned (REO) properties.

Next, find a real estate agent who specializes in selling foreclosed properties. Some of these agents sell bank-owned properties and work for the banks. If you are interested in U.S. Department of Housing and Development (HUD) homes, then you need to find a HUD-approved broker to place bids for you.

There may be less competition for buying occupied foreclosed homes because other buyers want to avoid the trouble of asking the previous owners or tenants to move out. However, if you treat the owner with respect when you view the property, they will be more likely to also treat you well. In many states, it is legal for lenders to pay the owner to leave. Often, this prevents the owner from damaging the house before he moves out. The owner only gets the money after he has cleaned the house, moved out and handed in the keys. If the home is rented, however, you have to honor lease agreements. A real estate attorney can help you with the state laws governing this situation.


If the property lender didn't offer money as an incentive for the previous owner to move out, you might consider doing this after talking to a lawyer. You can lower your bid on the house to cover the cost of paying the owner to leave.

As a last resort, you or the lender can begin eviction proceedings through the court. Each state has its own eviction laws, so follow proper legal procedures for your area. It's a good idea to hire a lawyer to handle the eviction. Only a judge can force the owner out of occupied foreclosed homes. If the owner ignores the court order, then you can have the local sheriff or marshal forcibly remove the owner and his possessions. However, you’ll probably need a real estate lawyer if squatters moved into the house after the owner left because squatters' rights vary considerably from state to state and the eviction process can become a long and expensive legal issue.

Buying occupied foreclosed homes can be more challenging than buying vacant homes, but that doesn't mean you should avoid them. A foreclosed occupied home can be a sound financial investment. RealtyNow can connect you with real estate agents experienced in foreclosure sales, near you!

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