How to buy foreclosed homes in Ohio

Foreclosure homes can be a great opportunity for those looking to purchase a property at a discounted price. In Ohio, there are several ways to buy foreclosure homes, including through auction sites like Auction.com, OhioForeclosure.com, and HudHomeStore.com. Here's what you need to know to get started.

Before you proceed with looking for homes in the process of foreclosure you must understand a few risks. First off, you  typically don't get access to tour the properties. This means you don't really get to see what you are getting yourself into. Secondly, many foreclosure auctions are sold cash. Investors love the buying foreclosures and they typically have cash. Finally, getting a loan for a foreclosure can be challenging. Often you will need some type of rehab financing or some alternate financing option. **6 Ways to pay for a foreclosure that aren't cash**

1. Understand the foreclosure process in Ohio

Before you start your search for a foreclosure home, it's important to understand the foreclosure process in Ohio. Foreclosure is a legal process in which a lender takes possession of a property from the borrower who has failed to make mortgage payments. In Ohio, foreclosures can be judicial or non-judicial, and the timelines and procedures can vary.

2. Check auction sites for foreclosure listings

Auction sites can be a great resource for finding foreclosure homes in Ohio. These sites offer a variety of properties, including bank-owned homes, government-owned homes, and homes that are in the pre-foreclosure stage. You can search for properties by location, price, and other criteria, and you can often view photos and property details before bidding on a property. The negative is that these sites make money by charging additional fees to the buyers. That means you could be required to pay a buyer's "premium" of 5-10% on top of the final purchase price in order to buy the home. 

3. Attend foreclosure auctions in person or online

If you're interested in buying a foreclosure home at auction, you can attend in person or bid online. Auctions can be held by the lender or by a third-party auction company, and you'll need to register and provide a deposit before you can bid. Be sure to do your research on the property before bidding, as you'll be responsible for any liens or other issues with the property. In person auctions are always better. They are done fairly and ethically. While I can't say online auctions are 'unethical' they certainly don't have to go by the same rule book of an auctioneer. For Example, some of the foreclosure sites will reset the auction time clock if someone bids within the last 2 minutes of the auction. This means the auction just keeps going if peopel are bidding it up.  If you find yourself bidding on a property 30 minutes after the auction was supposed to end, you might want to stop bidding as you are just driving the property price up for the selling party.

4. Work with a real estate agent who specializes in foreclosures

If you're not comfortable navigating the foreclosure process on your own, you may want to work with a real estate agent who specializes in foreclosures. These agents can help you find properties, navigate the bidding process, and assist with the paperwork and closing process. Be sure to choose an agent who is experienced in working with foreclosure properties in Ohio. This is a little harder to come by then it was in 2010. The amouunt of foreclosures out there is drastically lower than it used to be so there isn't as much money in working foreclosures these days.  If you are new to real estate, just getting your license, this is a GREAT thing to get into specializing in, becuase you are building a book of investors and buyers who are more likely to have equty in a few years and remember the hard work you did for them in the beginning and use you to sell their properties.

 5. Sheriff's Sales

Each county in Ohio manages some foreclosures through the Sheriff Sale. These are usually without a real estate agent and usually are sold cash. The tricky thing with these is you have to pay in full within 24 hours of the auction typically. Also, banks send reprenstatives to bid on the homes they hold mortgages on to drive their price up. Sometimes the win and turn them into MLS listed Bank Owned Properties marketed by a local real estate agent.

6. Bank Owned Properties

These are not necessarily foreclosures but I feel it is important to mention them here. Bank owned homes have been through the foreclosure process and the bank has decided to buy them back and attempt to sell them to recoup as much of their investment as possible. Again, these are much less common than they used to be as foreclosure rates overall are down from 2010 peaks.

HUD Homes

HUD homes are properties that have been foreclosed on by the Federal Housing Administration (FHA). These homes were previously financed with an FHA loan and are now owned by the government agency. HUD homes are often sold at a discounted price, making them an attractive option for many homebuyers. 

The biggest advantages of HUD homes over foreclosures that are found elsewhere is that HUD homes most often can be toured like a regular home with a real estate agent, as HUD lists all of their homes in local MLSs. They also provide a property inspection report that discloses all known issues with the property and are more detailed than any other foreclosure sites. You will need to find a real esate agent whose broker is registered with HUD in order for them to help you with the buying process. Also HUD usually offers their homes only to owner occupants with the first days of the auction. If you intend to live in the property this is a great option for first time home buyers if you are handy or have the wherewithall to manage a team of contractors and the funds or lended capital to do so. 

The first step in buying a HUD home is finding one that meets your needs and budget. You can search for available properties on the HUD HomeStore website, where you can view photos and property details, as well as find a local real estate agent who can assist you with the purchase process.

Once you've found a HUD home that you're interested in, and have toured the property, you'll need to make an offer through a real estate agent. The agent will submit your offer on your behalf, and HUD will review it. If your offer is accepted, you'll need to provide a deposit and sign a purchase agreement. The down side is this is a blind bid process, the listing agent usually won't disclose to # of offers or any other details of the offers. You have to give it your best shot up front. 

One important thing to note about buying a HUD home is that they are sold "as-is," meaning that HUD will not make any repairs or improvements to the property. You'll need to have the property inspected and make any necessary repairs yourself. HUD will also not permit the listing agents to give you KEYS to the property. So you will have to bring a lock smith to get in.

There you have it, a brief overview of buying foreclosure properties in the state of Ohio.