Foreclosure houses are appealing to first time home buyers and real estate investors because they can be purchased below market value. The majority of foreclosure properties sold through public auctions or lending institutions require repairs or renovations. However, most can be transformed into a great residence or investment property.
There are pros and cons to buying foreclosure houses. Individuals who have never purchased real estate through public auctions should take time to learn how the process works. Otherwise, bargain foreclosure properties can quickly turn into money pits.
Foreclosure real estate is rarely sold in perfect condition. More often than not, evicted homeowners neglected the property for a considerable amount of time. It is not uncommon for foreclosed borrowers to inflict damage on the home, remove appliances and bathroom fixtures, or leave it a filthy mess.
Buyers should be prepared to engage in physical labor or hire contractors to make repairs. It is important to factor in these costs prior to bidding on foreclosed homes. Buyers are allowed to view properties sold through auction prior to making bids. Bidding on foreclosure real estate sight unseen can result in substantial financial loss.
It is best to work with realtors or real estate investors who specialize in foreclosure properties. These individuals possess the knowledge and insider-secrets to help buyers negotiate the best deal.
Four options exist for purchasing foreclosure houses:
1. Purchase properties directly through public auctions
2. Purchase homes directly from the homeowner through a shortsale transaction
3. Hire a realtor to bid on foreclosure homes on your behalf
4. Purchase foreclosure homes through private real estate investors
Unless buyers purchase foreclosure houses with cash it is best to obtain prequalified financing approval prior to looking at foreclosure properties. This ensures quick home loan financing once a good deal is found. Prequalified lending can also provide additional negotiation leverage when making offers on bank owned homes.
Working with realtors and foreclosure specialists can help buyers locate properties within their price range. These real estate professionals have access to national databases consisting of millions of distressed properties, which can save buyers hours of time trying to locate houses on their own.
Individuals interested in buying foreclosure houses should take time to investigate the area to determine the value of others homes for sale in the area. Prospective buyers can obtain comparable sales reports via realtors or online using sources such as Realtor.com.
Once research is complete, compile a list of foreclosure houses of interest. When working with a realtor, the agent will arrange viewing appointments. If working alone, buyers will need to contact sellers or their real estate agent to arrange an appointment.
Take along a notepad and pen or camera to document potential problems. When buying bank foreclosures the more problems you can find, the better your bargaining power.
Finally, be certain to determine if creditor or tax liens are placed against the property. Foreclosure houses sold through public auctions often have liens attached. Lien removal can be a time-consuming and costly task.
At Simon Volkov, we offer a variety of bank owned foreclosure houses, short sale real estate and probate properties through our Real Estate Investment Club. Currently, there is no fee to subscribe to investment listings. To join, enter your email address via the subscription box on the left sidebar.
We are currently buying foreclosure houses in California, Washington, Nevada and Arizona. If you need to sell your house quickly submit property information via the "we buy houses" form. Simon Volkov will contact you within 72 hours of receiving your information.
Published on April 08, 2010 at 02:26 AM | Comments: 2