Did you know every day, thousands of homes are being repossessed by banks and sold to the top bidder. A number of of them are real junkers but a lot of these foreclosure homes are in outstanding condition and are priced below market. With a little persistence and the right guidelines to follow you might be well on your way to homeownership for a lot less than you could have imagined a few years ago.
Five things you need to know
1. Be Ready – Know Your Marketplace. Most foreclosures sell in 3 days or less so spend some time with your Realtor getting to know your target area. If you know the comps before a foreclosure hitting the area, you will be prepared to act quickly and trump any other competitive buyers. Have a pre-approval ready and waiting to roll so there is no hesitation. If you wait, you might lose the deal before it even gets off the ground.
2. The Best Things in Life Are Worth Working For – Sure, some foreclosures are in excellent shape, but if you want a deal of deals, you are going to have to put in some manual labor. Figure out what things cost to replace from reputable, professional sources and look for homes with “good bones.” Finding good structural components should be your primary concern. Countertops and carpeting can always be changed later.
3. Inspect, Inspect, Inspect – Banks will not generally make any representations (or guarantees) about the property you are about to purchase; use some of the money you are saving when buying a foreclosure and get the best professional inspectors you can. A little investment up front can save you a LOT in repairs after purchase.
4. Be Prepared To Pay Close to Full Asking Price – In some of the hotter foreclosure markets (Florida, for example) banks are not willing to negotiate much on great houses. They price them at 60%-80% of fair market value up front in order to sell quickly and, if you waste time nickel-and-diming the bank, someone else is likely to purchase the home you like. This is especially true of new foreclosure listings.
5. A Realtor Will Do You A World Of Good – Agents spend lots of time combing the market for good deals. Good ones know their marketplace intimately and have often worked closely with many of your future neighbors. Use their experience to help you find the best deal possible. They will have the objective, professional eye you need to spot resale potential before you purchase. This single choice will save you thousands down the road – and agents usually charge buyers nothing to work with them!
The markets at present are a perfect storm for sellers – but there has not been a market like this for buyers in quite a few generations. Home prices and interest rates are really low right now making homeownership more affordable than it ever will be again. At the present is the time to buy. If you wait until prices are rising again, you will have waited too long.
If you are a first time buyer you have even more reason to buy now. The government is offering a special limited time opportunity and will give you $8,000 towards your new home. So why wait buy that dream home now.
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