Here are some tips to consider when thinking about buying a foreclosure in Birmingham AL. First, if you are a first time homebuyer with limited funds, buying a foreclosure may not be the best option for you. Most foreclosures are in need of repair and lenders holding the property are not at all willing to do anything to the property whatsoever. This causes two problems: (1) the ability to get financing and (2) the cash required to fix up the property. Lenders will not finance with deferred maintenance. If you are able to somehow get it financed, you likely will have no money left to be able to get the repairs completed.
Another problem with buying a foreclosure in Alabama is the 12 month right of redemption. While only about 1% of residential properties are ever redeemed, the former owner has the right to get their home back by paying back all amounts owed plus penalities and interest (at 12%). Also, at closing, you will have to pay (or have the seller pay) for a redemption bond which is ranges from $11-13 per thousand so on a $150,000 property, you are looking at another $1,800 or more to deal with to insure that, if the former owner exercises this right, everyone is made whole on the deal.
In short, buying a foreclosure is not necessarily always a great deal so I encourage you to (1) work with an experienced agent and (2) consider talking with a knowledgeable closing attorney before getting too far into the process. If you still are interested in getting information on foreclosed properties, input your information below to receive a free Foreclosure Report for the property address you specify or click on one of the popular links provided.