Foreclosed homes have been sweeping the housing market these days, bringing down values of properties, dislocating families and sending the government scrambling to manage this crisis. However, some homebuyers view a once-in-a-lifetime chance opportunity in the dark headlines-buying foreclosed homes at very low prices.
When buying a foreclosed home, keep in mind that you are cashing in on a home someone was unable to pay for. Foreclosures are hard to locate and to execute transactions. Nonetheless, the potential to run them over for a neat profit could be there.
The following are tips to consider when purchasing foreclosed property:
1. Understand that foreclosures mean that the homeowner was unable to pay his or her mortgage and the lender takes back the property, thus there are legal steps involved in the buying process and may differ in every state.
2. Check out the advantages of buying a foreclosed home. Because the bank or lender wants to recover as much of its investment fast, foreclosed homes are usually unloaded at considerable discounts, up to thirty percent or even more.
3. Look for an agent who is fully knowledgeable or has a thorough experience in foreclosures. Some home sellers will not accept offers from unrepresented homebuyers.
4. Find foreclosure listings in real estate newsletters, magazines, newspapers and online search engines. Make sure to call lenders for REP properties. Furthermore, you should check public records for other details.
5. Make it a point to tour the property and do an inspection as closely as possible. Some foreclosed homes, unlike fixer-upper homes are fairly in good shape while others could be behind in maintenance.
6. Get your real estate agent to check out nearby or comparable homes in the area to determine if the asking price for the foreclosed property is indeed a bargain.
7. Make sure to check your credit report and correct any false data out outdated information. You should also try to get prequalified for a mortgage.
8. Determine if a foreclosed property has any liens attached to it, like unpaid property taxes and find out who is liable for these fees.
9. Have the home inspected and asks the seller if he or she will allow it. Some home sellers included this as part of the agreement, but homebuyers still has to pay for it.
10. Be ready to deal with a lot of paperwork with a foreclosure than you would in a conventional home purchase, especially if a government agency is involved.
11. Determine how long the house has been left vacant. The longer the vacancy could mean the more damage to it.
12. Take a look at the landscaping carefully. If the home has been neglected, vines, untrimmed trees and bushes could contribute to its deterioration. Remember that vines could crawl into windows and seedlings of trees could send roots down to the foundation.
Keep in mind that some investors who purchase foreclosed homes with the intention of doing as little as possible to it and hoping to resell for a profit may find little profit and plenty of headaches. Some cities are cracking down on neglectful property owners and charging penalties that could increase over time and unkempt homes lose their values fast.
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