Sep
Foreclosures for sale: Find The Best Foreclosed Homes
So you’ve decided to seek your fortune in foreclosures for sale? The first thing to keep in mind is due diligence. Remember, “if it sounds too good to be true, it usually is.” While it is not uncommon to find homes selling below 50% of market value the banks are usually no dummies.
You can expect to buy anywhere from 5% to 20% below market value but of course, it all depends on the condition of the house.
Make sure you look at the neighborhood you might be investing in. Are you in a subdivision? How many homes are you competing with in that subdivision? Are you buying the worst home in the best neighborhood? How about location? Are you within 20 to 30 minutes of all the necessary amenities most people are looking for?
Lot’s of questions..for sure…but these kind of question are the type you should be asking not only yourself but your realtor as well. No, you don’t have to be living in an exclusive neighborhood but it should be in an economically stable one. It really has nothing to do with who is moving in and out of the neighborhood but how much the going price is that is being paid for those homes.
Make sure you do a thorough investigation on the physical condition of the property. People facing foreclosures for sale may not be keeping up on the maintenance or actually damage the property out of anger due to their situation so you must include those costs in your purchase price. Does it make sense financially to buy the house at what the bank is asking? The only exception I would have to this rule is if in fact the home is in an exclusive location.
Make sure you look at recent foreclosure sales in the neighborhood. Try and determine what pattern the sales prices are establishing. Recently, some banks have decided to play the bidding game differently so be aware of what you are dealing with. Banks may not be giving you the true story of actual bids on the properties they are trying to unload. Don’t get caught in a supposed bidding war. You may not be bidding against anyone…who knows….the banks won’t tell you. By knowing what other properties have sold for in the area should be a guage at what you are willing to pay the bank for the property.
If you can, determine if the former owner is embroiled in any lawsuits that could conceivably lead to a challenge of the sale and tying up the property. In theory, once a property reaches the foreclosure stage it is going to market unencumbered. That means nothing to an attorney who sees opportunity in attempting to delay disbursement of the former owner’s principal asset. Delay is the operative word here; if you’re going to invest in a property you need to be able to put it to work for you with dispatch.
The foreclosures for sale game can be a tricky one. Make sure you know how to play the game before you start and you can wind up with a diamond in the rough.
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