With home foreclosures at an all-time high, there’s no shortage of great opportunities for buyers and real estate investors. Buying foreclosure homes can be a great way to save money, and invest for future. But you have to have the information and tools necessary to find the right properties and decide which methods of buying are best suited to your needs, abilities and price range.
There are three methods of buying foreclosed property;
Buying a pre-foreclosure or Short Sale – This involves dealing directly with the homeowners, and can be a great opportunity to find significant discounts, as most homeowners look to sell for reduced prices simply to raise enough to pay off their remaining loan debt.
Foreclosures at Auction- Foreclosure Auctions can be tough because they sometimes occur on short notice and don’t allow you much time to do research and analysis of the property.
Bank-Owned or Real Estate-Owned Properties also known as REO – This presents the least risky and very interesting opportunity for home buyers and investors in search of homes for sale at discounted prices. Bank has paid off all the existing debts and taxes on these properties, and in many cases, repairs the home to bring it up to the standards of the neighborhood.
There are few things you should know and do before you bid on the cheapest foreclosed property :
Secure financing – Get Pre-Approval prior to searching for foreclosure properties. Figure out how much you are qualified to borrow. Being pre-approved for a purchase will enhance your negotiations on the home.
Inspection – Make sure that you give the homes a thorough inspection before you place your bids. Look for structural problems, cracked foundations, and sagging roofs, which require extremely expensive repair work. You want to be able to estimate the cost for repairs or be able to report the home’s true condition to your lender.
Research home values in the area to make sure you aren’t assuming an overpriced loan; that way, you’ll be better able to identify potential deals.
The biggest bargains can be found in areas where there’s a large concentration of distressed homes for sale. Find out if the property is located in a decent neighborhood with good schools.
These days is easier than ever to find homes in foreclosure . Web sites like;
Foreclosure.com and RealtyTrac list thousands of foreclosures for a monthly fee.
You can also find foreclosed properties free on sites like
Country wide – http://www.countrywide.com/purchase/f_reo.asp
Fannie Mae – http://reosearch.fanniemae.com/reosearch/
HUD REO- http://www.hud.gov/homes/index.cfm
Many Realtors will provide you with complimentary lists of REO properties in cities you are interested in. Just ask.