Buying a foreclosed property requires you to keep many things in your mind. Foreclosed properties might give you the best deal as they come with heavy and exclusive discounts. But, many people still don’t have an idea of what exactly foreclosed properties are. There are some properties where homeowners fail to repay the loan, and banks auction those properties to recover the amount. Such properties come under foreclosed properties. And this is the reason you can get them at discounted prices.
You may get the best bargains for your desired property in the market. You just need to pay for the minor renovations or repairs of foreclosed property, and you are good to go. Don’t forget that foreclosed properties are usually meant for the risk-takers and not for traditional buyers.
Let’s find out the tried and tested tips for choosing a foreclosure property in the housing market.
Get the right team – Get in touch with the professionals who have previously helped many people in the past to buy foreclosures. It will help steer clear of potential pitfalls. A realtor who knows the knowhows of the local real estate market aids you in finding out the areas that are all set for foreclosures. They know the houses that have been on sale for a long time and might be ready for sale at a lower price. Additionally, they also know the foreclosed properties that have not been made public in the market. Real estate agents will fill you up with useful recommendations.
Assess the market value – Foreclosures come with great opportunities for buyers who want to purchase the property at a reasonable and lower price. If you are a buyer, see how much you can spend, make a budget and stick to it. Research the market thoroughly, and spend your time witnessing and visiting the auctions. It will help give you the feel of the market. Assessing the market value will let you give the best price for your property.
Consider your budget – There is no denying the fact that you will have to bear some additional expenses if you decide to buy or invest in a foreclosed property. So, find out the repairs and renovations you have to make in your new property and create your budget accordingly. You need to keep in mind the existing prices with regard to plumbing, electrical, and other major repairs before signing the agreement. You don’t want to stick to the negative cash flow in the future, right? So, plan your budget carefully.
Pre-foreclosures and short sales – Pre-foreclosures are the properties where a homeowner ceases to make their mortgage payments. And the short sale is the one when a borrower becomes ready to sell their home/property for less amount as compared to what they owe to get rid of the foreclosure. Experts at Levin Rinke Realty say that the apt time to purchase a foreclosure property is in its pre-foreclosure. The reason behind this is that you have to deal with the homeowner directly as far as negotiations are concerned. And you don’t have to deal with the bank that repossessed the home. Moreover, pre-foreclosure gives you immense benefits as the owner has to sell the house quickly or destroy the credit. This gives you the opportunity to buy the home for 60-70% of its market value. Keep in mind that it is quite daunting to get in touch with the homeowner during pre-foreclosure. Sometimes they are in denial to discuss the subject of selling a home. But, if any property is listed for a short sale, you will get the idea that they are up for selling the home.
What are your available resources?
You can find foreclosure properties and listings from many sources, namely –
Real estate agent – He is the primary source to find out your desired properties.
Websites – Multiple listing services and websites meant for home sales will let you give news about listings of foreclosures, short sales, or pre-foreclosures.
Government agencies – Government agencies have information about the foreclosed properties financed by them and a list of the properties they have seized for non-payment of taxes.
Public records – People file legal notices throughout the foreclosure process. Checking your local county recorder’s office or city courthouse can give you an idea of what you are looking for.
Hidden foreclosures – You might be thinking, what do hidden foreclosures mean? These are the freshly built mid and upscale homes. The construction-loan period expires without those homes being procured. Now, another question coming to your mind would be the reason these properties are called hidden foreclosures. The reason is – lack of promotion. There are fewer chances of these properties appearing on national multiple listing sites. Realtors and professional real estate agents have an idea about these properties. They can perfectly handle any sales deal. Having any hidden foreclosures? If so, research thoroughly and follow the important tips for safeguarding the property to buy it in a secure manner.
To make a long story short
If you are a buyer, research thoroughly the property that you are going to buy. Because there could be some taxes or claims on the property that you must know. Follow the above-mentioned tips to make the most out of your deal.