Why buying a foreclosed home may be your best bet as a homebuyer
Website design By BotEap.comThe real estate market is cyclical and is currently in a gradual recovery from the 2008 real estate crash. The number of foreclosed properties is less than it was a few years ago, but there are still opportunities to buy a foreclosure at a respectable price.
Website design By BotEap.comI don’t know what you’re doing, don’t buy
Website design By BotEap.comBuying a foreclosed property is not for those who have not studied the foreclosure process as thoroughly as possible. prior to buy a foreclosure (also known as real estate, REO, bank owned). Study information available online, take community college courses, and attend foreclosure investing seminars.
Website design By BotEap.comLine up your financial ducks
Website design By BotEap.comThe next step in shopping for foreclosure is to develop a detailed budget. Determine the absolute maximum you’re willing to spend, including mortgage, property taxes, and insurance. Include some funds for possible repairs.
Website design By BotEap.comThen research REOs in your real estate market of interest.
Website design By BotEap.comMany foreclosed homes need at least some rehabilitation. How much are you willing to spend on repairs? Are you planning to do sweat equity or will you need to hire a contractor and crew to get the job done?
Website design By BotEap.comNow look at your budget and make a list of what you can afford for a down payment and security deposit. Will you have to take out a mortgage loan?
Website design By BotEap.comHaving the financing lined up before you make your foreclosure offer tells the selling financial institution that you are a serious buyer. Please note that most REOs require this information along with your offer.
Website design By BotEap.comBe prepared to stick to your budget and if the deal doesn’t come under your limit, be prepared to walk away.
Website design By BotEap.comsmart buy
Website design By BotEap.comSome REOs are priced above market value. Find out what price similar properties are selling for in the area. Several online real estate organizations list “offsets” for the property you are interested in, as well as similar properties.
Website design By BotEap.comThe REO bank does not normally offer information about a foreclosed property. Some houses are in terrible condition, even uninhabitable. DO NOT consider, much less make an offer, foreclosure without first having a full inspection of the property by a licensed inspector. And be very careful with any property that is listed significantly below market value. It may be hiding some serious problems.
Website design By BotEap.comDon’t go it alone – work with a real estate agent who has a lot of experience dealing with foreclosures.
Website design By BotEap.comThe good deal
Website design By BotEap.comA good deal on an REO property is one that needs little or no restoration. Or, it could be the rehab property that fits your budget and financing.
Website design By BotEap.comA stronger offer is one for which you can pay cash. Be prepared to act quickly. Bidding wars for desirable property can be common. Do not lower your offer. Do it clean, in cash (if possible), with few or no contingencies and a quick close.
Website design By BotEap.comThe best bet on a foreclosed property is the one you prepared for, even before you began your search.