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 understand some basic foreclosure information. According to Investopedia, repossession of a home, is defined 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 getting 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 talk to 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 important to know 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 contact 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 require a fair amount of cleaning and maintenance and repairs there are also properties that are in quite a good condition and they do no require 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 inspect the property and the 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 rodents 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 put up for sale the way the previous owner’s left them, you must be aware of what you are getting. If at all possible, make one more visual check of the property before the final contracts are signed to ensure that there is no more damage than what you initially noted.
Contact your real estate agent again and get a print out of the equivalent value of similar properties in your area. Make sure of 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 removed.
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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