People who are looking to buy good deal properties, seasoned real estate investors and house-flippers often looked at the list of foreclosed properties for them to find cheap houses that are in good condition. However, while some made fortunes out of these foreclosed properties, equating it to easy money is a huge mistake – especially if you don’t have the knowledge how to maximize it. For house flippers, what is supposedly cheap might end up spending more on the repairs, renovations, among others.
You must know about getting into foreclosure list to avoid impulse buying or relying on emotions in sealing the deal. Well, in case you don’t have any experience in buying foreclosed properties, then check out this article written by Jennifer Bradley Franklin posted at Bankrate.com which talks about the basics of buying foreclosed properties. Read below to learn how buying foreclosed properties is done.
How to buy a foreclosed home in 5 steps
Who doesn’t love a good bargain? Buying a foreclosed home can score you a great deal and be a smoother process than working with a traditional owner.
“The advantage of purchasing a foreclosure property is, in short, price,” says John Soffee, a Realtor with Freedom Realty Services in Midlothian, Virginia.
What is a foreclosure?
Foreclosures happen when a lender takes a property from an owner who has defaulted on their mortgage and has fallen behind on payments. Lenders, in turn, will try to recoup as much of their investment as possible by selling a foreclosed home for slightly less than it might be worth.
In the right situation, “you are getting something below market value because the bank is motivated to get the home sold,” says Rose Sklar of The Sklar Team of Coldwell Banker in Weston, Florida. “Also, the bank tends to negotiate more than a typical seller would.”
5 steps to buying a foreclosed home
1. Find an experienced real estate agent
Hire an agent who is knowledgeable about the foreclosure process to represent your interests and will keep the transaction moving. One strategy for finding the right agent is to visit websites with a database of foreclosed homes in your desired area. Look for Realtors who have specialized real estate training in this area, such as the Certified Distressed Property Expert (CDPE) or the Short Sales and Foreclosure Resource (SFR) designations.
A buyer can work directly with the bank’s real estate agent instead of using a buyer’s agent to save on the commission split. This can be a risk, though, because “buyers feel more secure when they are (directly) represented,” Soffee says.
2. Get a preapproval letter
Unless you can afford to pay cash, you’ll want a mortgage preapproval letter in hand when you make an offer on a foreclosure, Soffee says.
“It separates the lookers from the buyers,” he says. Preapproval letters detail how much money you can borrow, based on the lender’s thorough assessment of your credit score and income.
Find a mortgage lender who understands your goals, and gather the necessary paperwork to obtain a preapproval letter. Read more here…
The very advantage of buying foreclosed houses is, of course, its affordable price, and a lot of these houses are in excellent condition with only a few renovations needed by the buyer. These types of properties house flippers and real estate investors are looking forward to sealing the deal for they bring in huge profits. First-time homebuyers must also look for these types of houses in the list of foreclosed properties. See how to buy foreclosed properties, equip yourself with the knowledge and skills to find good deals. However, if you are not confident in doing it on your own, you can always hire an experienced real estate agent to get the job done for you – for a price of course.
As mentioned by some experts, finding affordable homes that are in excellent condition are relatively easy. There are easy ways to make money in foreclosures the way expert house-flippers are slaying it. Check out this article published at Profitable Venture and know what are the easy steps in making money in buying foreclosed properties.
7 Easy Steps to Make Money Buying and Selling Foreclosed Homes
The real estate industry is known all over the world to be a very lucrative industry and some people make the mistake of believing that the industry is only opened to those who are already wealthy. The truth is that a determined entrepreneur that is interested in the real estate industry can make cool cash with little of no startup capital; you can enter the industry as a real estate agent and then make commission off properties that are listed for sale or for lease / rent.
If you are thinking of starting a real estate business, then you should consider starting with buying and selling foreclosed homes. Buying and selling foreclosed homes is one of the easiest ways of making great profits from properties business simply because one can get a foreclosed home below the market value due to obvious reasons. Homes are listed as foreclosures by banks or financial institutions for various reasons.
No doubt an investor can make great gains buying distressed properties, but at the same time if the risks are not properly analyzed it could lead to great loss. In essence, the beauty of this type of business is that you can either hit or miss. Now let us consider the steps to follow to be able to make profits buying and selling foreclosed homes;
Easy Steps to Make Money Buying and Selling Foreclosed Homes
1. Secure Pre–approval for a Mortgage
If you are interested in purchasing foreclosed homes, then you must be very proactive. Being proactive in this regard is all about securing pre – approval for a mortgage from your bank. This is so because most homes that are listed as foreclosure sells within a short period. The bottom line is that if you are hunting for a foreclosed property to buy, then you must have your financial instrument ready.
2. Work with a Real Estate Agent That Is Specialized in Foreclosed Homes
If you are a busy business man / woman or a busy executive and are interested in the buying and selling of foreclosed homes, then you must work with a real estate agent that is specialized in foreclosed homes. They know how to source for this homes and how to get good deals.
3. Be Apt in Getting Info on the Sale of Foreclosures
One thing about foreclosed homes is that they don’t stay long in the market, there are loads of people targeting foreclosed home that is why you must be apt in getting info on the sale of foreclosures; you ears must be on the ground. As soon as you get the info of the listing of a foreclosed home, then you need to be prompt in taking decisions; any time wasted can cost you the deal.
4. Get Listing of Foreclosed Homes and Compare Prices
Although, people rush to purchase foreclosed homes that are listed in the market does not mean that you will not carry out your due diligence before making a purchase. If you are interested in buying and selling foreclosed homes, ensure that you try as much as possible to get the listing of foreclosed homes in your choice location, and then compare the prices. This is necessary if you truly want to maximize profits.
There is no need to worry if this is your very first time browsing into long lists of foreclosed properties, finding some bang for buck house that will soon become your residence, or will bring you huge profit if you’re going to house flip the property. For real estate investors like house flippers, experience also helps a lot in making better decisions in buying foreclosed property to flip. Try also to compare prices from different foreclosure listings, finding what’s cheaper to fully maximize profit.
Kevin Mercadante of MoneyUnder30 also posted an article that discussed some of the most useful tips on how to buy and be profitable in buying foreclosures.
How To Buy A Foreclosed House (And Actually Make Money On It)
Buying foreclosed properties, fixing them up, and selling them looks easy on TV, but in reality, it’s a more complicated process than most people think. Here’s how to buy a foreclosed house and actually make a profit.
Those foreclosure programs you see on TV make the foreclosed housing game seem way more exciting and entertaining than it actually is. But, if they’ve convinced you it’s an easy way to make money and you’re looking to take a shot at it yourself, there’s a lot you need to know.
Buying, renovating and selling a foreclosed house is incredibly profitable for some, but be warned—it’s a complicated process, and the potential to lose a lot of money is very real.
So how can you buy a foreclosed house in such a way that it’s likely to be a profitable venture?
First order of business: know market values
Your entire foreclosure adventure will rise and fall on your knowledge of the market area where you’re purchasing the property. The more you know about values in the area, the greater the likelihood of success.
A foreclosed property has two values—the purchase price you’re likely to buy the house at, and the market value that the finished property is likely to sell for. The difference between the two will determine how much money you should spend on rehabilitating the property, and how much profit you can expect to make on the trade.
There are different ways you can make this determination. A quick method is to use online resources, such as Realtor.com and Zillow.com. Both sites provide a “high altitude” look at the value of a property, or at least the general neighborhood.
That’s a good starting point, but you’ll have to drill down deeper, eventually. If you plan to make an offer on a foreclosed property, you’ll have to have a more accurate picture of what the specific completed value is likely to be. The best source for this information is a trusted real estate appraiser. With just the address, an appraiser can determine final market value based on sales of comparable homes in the area.
Where to find foreclosed houses
There are actually several sources where you can find foreclosed houses. Each has its own benefits and drawbacks.
These can be good sources since foreclosures are typically posted in local newspapers. They can allow you to get into the process before the general public. For example, if a property is listed as a Notice of Default (NOD) you may be able to contact the current homeowner and work out a purchase before the property goes to auction.
The drawback is that you will probably need to be an all-cash buyer if you come in at this stage of the process. And competition from other foreclosure buyers can be heavy for these properties.
There are actually websites that specialize in foreclosures. Zillow.com is a source here, but you should also check out RealtyTrac.com, since foreclosures are most of what they do. There are also online county public records databases, but this can be akin to sifting through the sand, since they include so much detail and much of it is dated.
Keep in mind that while it is shown in various websites and videos that making money out of foreclosures is very easy, the reality is that it is more complicated than you think, especially if you don’t equip yourself with the right knowledge and skills to get the best deals. You must also willing to take a huge risk since this investment could potentially lead you to lose money. Learn first how house flipping works, then study how to get the best home deals out of foreclosure lists. A combination of these skills will definitely bring you to house flipping or home buying success.
It is unfortunate to see someone loses hard-earned homes due to foreclosure. While it is a loss for some, it is actually a win for first-time homebuyers who are looking to find affordable homes that are in excellent condition. House flippers also love to flip foreclosed properties since they only need minor repairs or renovations, selling it for a profit. Purchasing a property in the foreclosure lists has its pros and cons, but if you’re ready to face the challenge, whether you’re a home buyer or an investor, Dependable Homebuyers can help you browse through the long list of foreclosed properties, finding the best deals and sealing the deal. To learn more, visit their website at https://www.dependablehomebuyers.com and we look forward to hearing from you.
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