Tips on Buying Foreclosures

October 19, 2009 by  
Filed under Blog, Tips on Buying Foreclosures

It has become extremely easy to buy foreclosed homes.  The hassle of going though a million files to find the right foreclosed home is no longer a reality.  Many people are going through real estate agents to purchase foreclosed homes.  Here are some tips when it comes to buying foreclosures:

Buy from a Bank

When you purchase a foreclosure from the bank you can inspect the property for any defects before deciding to purchase.  In addition to this you can finance the property with a mortgage, which allows you to leave all your cash at home!

Work with a Contractor

Many investors buy foreclosed properties without having a thorough inspection of the property.  It is a good idea to bring a contractor with you , so that they can map out the repairs needed and how much it might cost you.  This is extremely important when buying foreclosures.  The main problem many investors face is underestimating the repairs needed on a property.  Many contractors will give a free estimate of how much and how long the repairs will take.

Keep the Bid Low

Banks have a large inventory of homes right now, which means that there is a large number of homes that has been sitting for a long time.  It is important to do your research on these properties and start your bid out low.   If one does a sufficient amount of research you can bid low and most likely get the property you want!  You are going to want to set your first offer in at 20% below market price.

The Waiting Game

Some investors are getting lucky and receiving answers withing the 48 hours of their bid, others are dealing with lenders who are taking as long as three months. It is important to stay patient because your investment will be well worth it.   The only issue with waiting is that, in the interim someone can bid a higher offer which will push your offer out.  The best thing to do, is to have several properties to invest in, and make sure that you are pre-qualified before bidding.  Most importantly you want to always follow up!

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