The Secrets of Foreclosure Investing
Buying real estate through foreclosure will save you money. They say
that it is a buyer’s market out there. But what if you don’t have a
lot of disposable cash to put a down payment on a house? Are you
reduced to renting for the rest of your life? No. There are plenty
of options for people who need a hand securing their own home. One
way is to look into buying a piece of property that has gone through
repossession proceedings and now belongs to the bank.
Before you get started with purchasing a foreclosed property, you
need to know some basic foreclosure information. According to
Investopedia, repossession of a home, is described as ‘a situation
in which a homeowner is unable to make principal and/or interest
payments on his or her mortgage, so the lender, be it a bank or
building society, can seize and sell the property as stipulated in
the terms of the mortgage contract’. With our economy struggling the
way it is, this is becoming a reality for more and more people. For
a homeowner, this is a pretty scary word. But sometimes it can
actually be a blessing in disguise.
Finding real estate that is in foreclosure is the first step to
receiving a good deal on your next home purchase. Check the
classified section of your local newspapers for listings, and
sheriff’s auctions. You may also call a local real estate agent who
may know of property that will be going into default status. It is
also advised that you contact government agencies, such as the VA
and HUD, as well as banks and other lenders to see if they have any
listings you may be interested in.
The auction buying of foreclosed properties is good ways of gaining
money. If you do not know how to buy and sell foreclosed property it
could be one of the easiest ways of losing money. In foreclosed
properties, there is the difference between the highly discounted
price and the estimated value at which it can be sold. The important
consideration here is that it is not necessary that the bidding at a
foreclosed property auction is competitive. It is based on the
manner in which you assess it. This is a prime difference from other
auctions and a clear advantage.
It is essential to understand the proceedings for purchasing real
estate that is in foreclosure. The next step after finding the
property you are interested in is to make sure you understand the
proper repossession proceedings in your state. Each state may have
different stipulations that you will need to be aware of in order to
purchase the property as smoothly and simply as possible. Check at
your local library for more information on these proceedings or talk
to a lawyer. Because purchasing a piece of property that has been
repossessed can be legally tricky, it may be advisable to retain the
services of a lawyer just in case.
The possibility of getting a good profit on there properties is
quite high. The fact is that there are many foreclosed properties
that entail a fair amount of cleaning and maintenance and repairs
there are also properties that are in quite a good condition and
they do not need too much of maintenance and repair. There are many
foreclosed properties that require little maintenance and repair and
they are made livable if a little bit of repairs are done in them.
The banks and other financial institutions keep the property and
they sell them out at a good amount of money for them. These real
estate properties we are talking about are available for sale and
you can get a good bargain out of them. If some renovation needs to
be done you have to examine the property and then find out to what
extent the repairs are needed.
Before you purchase, be sure and inspect the property. Once you are
familiar with the course you will need to take to purchase the
foreclosure real estate in your name, you are going to want to
inspect it yourself. The services of a professional contractor may
well be worth the extra money you spend in order to determine that
the property is in good, liveable shape. If you are willing and able
to repair cosmetic damage, make sure the property is secure, solid
and not needing any immediate, large-scale renovations.
Also have the property checked for insects, termites, or other
potentially harmful animals and bugs. Even if the real estate is a
simple strip of land, you want to make sure that it is in good shape
for whatever you have planned to do with it. Because most of these
properties are sold the way the previous owner’s left them, you must
be conscious of what you are getting. If at all possible, make one
more visual check of the property before the final contracts are
signed to make sure that there is no more damage than what you
initially noted.
Contact your real estate agent again and get a print out of the
comparable value of similar properties in your area. Verify
ownership and make sure they do have any other liens on the property
that could forestall your purchase. This may be accomplished by
having a title search performed at your local government office. If
there is a lien on the property, find out what will need to be done
in order to have it detached.
If everything is copasetic, then you are ready to contact the agent
in charge of the foreclosure. Find out what is the minimum amount
the bank will accept for the property and have your financing ready
and in place if you are not assuming the loan. Be sure that there is
no grace period for the current owner to buy the property back. This
is a protection of your rights. And finally, make a bid on the
property. Above all else, make sure you enjoy the piece of property
you have just purchased. This foreclosure real estate has become
your little slice of heaven for a fraction of what you could have
paid.
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