If you’re buying foreclosures, you’ll be disbursement a while day after day browsing foreclosures listings, craving for promising properties. You will have a decent plan in mind of what you’re craving for and you’re hopefully viewing proceeding listings day after day, therefore as to not miss a promising property. If you consider listings long enough, you’ll eventually realize a foreclosed home that meets your desires and your budget. Once you discover a promising proceeding, what do you have to do?
The first step is to act fast and make contact. Foreclosure listings will often list the seller’s information. Look at this information closely. Is the seller a bank, an HUD-approved real estate agent, or a homeowner eager to sell the property as a pre-foreclosure? Contact the seller and ask for a tour of the property as well as additional information about the property. The more you know about the foreclosed home, the more likely you are to make the right decision about purchasing. Be wary of sellers who are reluctant to let you view a home. Foreclosures are sold “as is,” so you are responsible for any repairs a home needs. For this reason, it is critical to carefully any property you consider.
It is useful to create a “short list” of potential foreclosure properties and contact several sellers at once. Since many foreclosure homes are sold at below market value, they tend to sell quickly. Any delays – such as sellers who don’t return your calls promptly – can mean that you lose out on a foreclosure opportunity. The good news is that new foreclosures are always being placed on the market. By continuing to call promptly when you find a promising property, you will eventually find a low-priced foreclosure home that may become yours.
Hopefully, you have your financing in order before you contact the seller, but if you don’t now is the time to start arranging a home loan. Most foreclosures are sold fairly quickly, so having cash in hand important. The buyer ready to pay up front is often favored for an HUD home, for example, and most foreclosure auctions require payment in full up front on the day of the auction. Since foreclosures are so inexpensive, you may even be able to pay for them using a low-interest credit line. If you decide to opt for a traditional mortgage, work with a lender who is able to let you access your loan money very quickly. This will give you the best opportunity to buy a great low-cost property.
The only exception to this rule concerns REO properties. If you are buying Real Estate Owned (REO) real estate directly from a bank, you can often get a great bargain by buying your property and getting financing from the same bank. Not having financing and giving the bank an opportunity to woo you with a great financing deal can save you money on your foreclosure and your home loan.
Once you have found a foreclosure property you are interested in, get the inside scoop on the house and neighborhood. Hopefully, you have started researching neighborhoods before you even looked at foreclosure listings. If not, now is the time for a quick trip to the library. Even if you have researched a community well, though, you still need to research the foreclosure property you are considering. At the very least, hire an independent assessor and inspector to evaluate the property for you. This can tell you how much the property is worth and how much you can expect to spend on repairs. This is invaluable in helping you develop a good offer. In addition to an inspector and assessor, you may want to research county records to find out if there are any liens against a property. You may also want to research the property to find out what taxes, utilities, and insurance for the property are like. The more you know about a foreclosure home, the more you can understand about its true value.