With more homes being foreclosed on than ever before in history, savvy buyers are picking up homes are in great condition and are priced below the market. With a little patience and some preparation, homeownership could be a lot closer than you think – and a lot cheaper, too.
1. Be Prepared – Banks want to sell their foreclosures as fast as they can. In order to do this, they make their homes the cheapest on the street – and their strategy works. Most bank-owned properties sell in the first 30 days of being on the market. Make sure you are ready with a mortgage pre-approval or bank statement showing available funds when the house you like comes on the market.
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. Know The House You Are Buying – The home inspection is NOT the place to save money. Get the best inspector you can afford and be present at the inspection. If the house has a septic tank, make sure you get that inspected, too. Banks usually will not fix anything so it is really important to know the condition of the home you are investing in.
4. For The Best Houses in Foreclosure, The Asking Price Is Often The Selling Price Or Close to It- Banks do not want to waste time negotiating and they often price their houses accordingly. It is increasingly common to see multiple full-price offers on the best foreclosures the first week they come on the market. Know your market and offer accordingly. If full price is $30,000 below the comps, you are still buying for $30,000 less than you would otherwise be able.
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!
It is really tough to be a seller right now – you cannot compete with the banks. If, however, you are thinking about buying a property, then there has not been a time like this to buy in decades. With home prices and interest rates at all time lows (but interest rates are rising!), homeownership is easier than it ever will be again for qualified buyers. And, for first time buyers, there is a once in a lifetime opportunity to get the government pay $8,000 towards your new home.