There are lots of good deals you can find from a list of foreclosed properties. A house was foreclosed for various reasons; homeowner failed to buy monthly mortgages and necessary fees to keep ownership of the house. The house’s worth depends on the current condition of the house the moment it was listed as foreclosed property. For expert real estate investors or newbie homebuyer, finding good deals from foreclosure listings is a challenging task, but really worth it.
Tracey C. Velt posted an article in Bankrate the needed steps to a great foreclosure buy, finding best deals at a reasonable cost.
7 Steps To A Great Foreclosure Buy
Getting a good deal on a foreclosed home
Foreclosure. It seems half the country is in it and the other half is trying to make a killing on it.
The number of foreclosed homes staggers the imagination and with more adjustable-rate loans about to reset, the end is nowhere in sight. The crisis, however, provides the opportunity to purchase a house that was all but impossible for many to afford in the boom years.
But there are many pitfalls and a hasty buyer can end up in a quagmire.
With investors flocking to capitalize on discounted properties, good deals usually go fast. It’s unrealistic to think you’re going to get a pristine property in a prime location for 50 percent less than area comparables. But 20 percent under the neighborhood market is very possible. If you’re a potential foreclosure buyer, the obvious place to start is price and condition. But there’s far more to it. Consider these seven top tips to get your best deal.
Look for mispriced listings
“This can happen two different ways,” says Sean O’Toole, founder and CEO of ForeclosureRadar.com.
“The underpriced properties get a ton of activity and go quickly, but you can really get a better deal on an overpriced property,” he says.
An overpriced property will generally get little interest and may sit on the market for a year or more. Therefore, when someone actually makes an offer, the bank may act on it quickly.
Make sure repair costs fit the plan
“For the homebuyer who’s up for the challenge, it can mean getting a property at less than market value,” says Aaron Lewis, broker/owner of The Lewis Team at Prudential California Realty in Turlock, Calif.
He offers this example: “If the home is listed at $170,000 and needs $10,000 worth of repairs, take a look at comparable properties in the area. If the house would be worth $200,000 with the repairs done, then you’re getting a $200,000 property for $180,000 and that’s a great deal.”
In addition, to move properties more quickly, says F.F. “Chappy” Adams, president of Illustrated Properties, in Palm Beach Gardens, Fla., “lenders are often making significant repairs, replacing major items or offering repair assistance.” That alone may make the home, once repaired, a good investment down the road.
Verify the neighborhood aids appreciation
“A good neighborhood supports your home value over time,” says Lewis. How do you determine that?
In addition to scouring the neighborhoods for well-kept yards, easy access to shopping and short work commute times, look at school scores, says Lewis. “A good school district will usually help housing hold its value over the years.” See full post here…
For some, it may be a crisis, but on the flipside, it is an opportunity to purchase a house that was impossible for a lot of people to afford in the boom years. Always check for the house’s price and its condition. House repairs for damaged house incur additional cost. To avoid this mistake especially for first-time home buyers, check out these cool tips by Jeanne Baron of This Old House.
9 Tips for Buying a Foreclosure
In this market, buying a foreclosure can mean helping a neighborhood to survive. Here’s what to look out for if you’re considering it
A tide of foreclosed properties has been sweeping into the beleaguered housing market, bringing down property values, dislocating families, and sending municipal governments scrambling to manage the crisis. But some buyers see a once-in-a-lifetime opportunity in the gloomy headlines; they are buying up foreclosed properties at ultra-low prices. Real estate agent John Lynch of Keller Williams Greater Cleveland West says he has interested buyers calling from all over the country, and as far away as Israel. Some are buying in bulk. “One investor I am working with right now wants to buy 200 houses all under 10K.”
Would-be homeowners are not excluded from the bonanza. Despite economic fears and the struggling housing market, Tonya Perkins-Stoudermire of McMullan Realty in Cleveland says this may be an ideal time to think about the dream of first-time home ownership. She tells the story of a friend who waded into the foreclosure market and came out ahead. “My girlfriend bought a house last summer. It has two baths, a two-car garage, and two fireplaces. She loves it. Her house is 350 dollars a month, with taxes and insurance. She’s in her late 40’s and had been a renter all these years.”
Those are the high notes, but these agents tell other stories, too. There’s the one about a far-away buyer who learned he owned a bunch of vacant lots, instead of houses. “It’s not for the faint of heart,” says Lynch. Lynch has seen the same house at foreclosure auctions more than once. “That hurts us all,” says Lynch.
A check-in with real estate professionals, home inspectors, and federal housing officials offers these words to the wise on buying a foreclosed property.
Budget carefully. Agent Tonya Perkins-Stoudermire says don’t let a small price tag lure you into a quick deal. Be sure to ask yourself a number of questions: Do you have the money for the extensive repairs these houses often need? “Do you have a crew. If you plan to rehab and then rent, can you afford the house if you don’t find a tenant? If you do your homework, there’s little risk,” says Perkins-Stoudermire.
See the house for yourself. “You can’t buy them sight unseen,” says Bill Richardson, president of the American Society of Home Inspectors (ASHI). “If you’re an investor from Chicago and you’re buying in Tucson, you’ll need someone to evaluate the house in person.”
Look at the neighborhood. Your homework should include evaluating the neighborhood. You may not be able to recoup the cost of the repairs if the value of the house is depressed by widespread foreclosures or high crime in the area. Tonya Perkins-Stoudermire says she also encourages buyers to study the neighborhood’s appeal at all hours, including at night. Click here to read the rest of this post…
Some buyers and investors see foreclosures as an opportunity to buy ultra-low priced houses. A property is foreclosed for various, one of them might be bad conditions on the real estate market. There’s nothing to fear for first-time homebuyers. On the other hand, for investors, its a much bigger opportunity to make huge profits. For them, it is the hottest thing going in real estate investing.
Jeff Rose published an article at Good Financial Cents a must read property guide to buy foreclosed homes and make serious money of out it. Read the article below to find out more.
The Must Read Property Guide to Buy Foreclosed Homes and Make Money…Serious Money
It is no surprise; there are a LOT of Foreclosures in the Real Estate market right now.
It is also no surprise these houses can be bought at steep discounts.
In fact, Foreclosures, in my opinion, are the hottest thing going in Real Estate investing.
The market is full of them, and the banks are holding thousands back, so as not to flood the market even more. As most of you know, banks are not in the business of Real Estate. They are in the business of loaning money.
When a bank gets a Foreclosure, it is a toxic asset on the banks books. Now, more than any other time in history, banks are dumping these toxic assets for pennies on the dollar.
Before you quit your day job and decide you are going to get rich buying and selling Foreclosures, know this:
The first stage of the Foreclosure process is known as Pre-Foreclosure. This means the individual who owns the mortgage is behind on their payments. Depending on the bank, the payments could be between 3-12 months behind. Yes, some banks do not start the Pre-Foreclosure period for 12 months!
At this stage, the owner is still living in the house. Interest and penalties are accruing on their loan, but the only thing that is really happening is their credit score is going down (rapidly) and they are getting a lot of letters in the mail from the bank. The bank has not decided to go full blown foreclosure yet, as they are attempting to work something out with the home owner and save themselves the very high cost of the foreclosure process.
The positive to buying at this stage of the foreclosure process is you obviously have a motivated seller. Depending on their situation, they may be willing to sell their house very cheap, in order to avoid foreclosure and save what they can of their credit.
The negative is they may not have a lot of equity in the house, and therefore their motivation may not be a factor. It does not do an investor any good to buy a house when it is worth what the seller owes on it (or as is the case with many properties in this market, the house is not worth what the seller owes).
Without getting too deep into investment strategy, know that in some cases it may be worthwhile to make up delinquent payments and purchase the house with creative financing. We will not discuss that in this post, but know it is a viable option and one we will discuss in future posts.
The Short Sale
The next stage in the Foreclosure process is when you can buy the house on a Short Sale. A Short Sale is when the bank is willing to take less for the house than what is currently owed on the property. There is no set time period for when a house goes from Pre-Foreclosure status to the bank being willing to do a short sale on it. See full post here…
While foreclosure has a sad story behind it for various reasons, real estate investors and first-time homebuyers see it as an opportunity to invest and make a profit or own your very first home at a very low price. Though some of these houses have minor, even major damages, if you know what you’re doing you can definitely manage home repair costs.
If you want to sell your house fast for reasons you don’t want to disclose, we at Dependable Homebuyers can help you sell your house fast and get your cash. Visit our website https://www.dependablehomebuyers.com and get started.
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