Home mortgage foreclosures have been filed at record rates over the course of the past couple of years. Moreover, experts in the industry nearly universally agree that home mortgage foreclosures will continue well into the immediate future. This means that there are many opportunities to buy foreclosed homes in most locations. A foreclosed home can provide profitable investment property opportunities, or it can become a personal residence. Here are some important tips and pointers to consider when buying a foreclosed home today.
Keep Abreast of the News for Foreclosures
The first thing to keep in mind when buying foreclosed homes is that it is necessary to pay attention to the news. Stay constantly aware of properties that are heading into foreclosure. Knowing about these properties early may be the key to getting them because they may not be on the market long. The eagerness of sellers and lenders to get a deal quickly closed can lead to a quick buy.
In order to accomplish this task, a variety of tools are available to assist in locating foreclosed homes. For example, working offline, the legal notices in the newspaper can be monitored. Going online, however, nationwide foreclosure listings can be found at such places as HUD, the Department of the Treasury (IRS foreclosures), and Fannie Mae. Some auction houses will sell many houses in foreclosure each day. Large bank websites will also have a number of bank foreclosure listings.
It is also a good idea to develop relationships with staff members of the county court clerk’s office (where foreclosure actions are filed). In addition, be sure to meet and make friends with various professionals in the real estate industry (such as mortgage lenders and brokers, real estate agents and brokers, attorneys, appraisers and so forth) that can provide frequent updates on what is taking place in the area in regard to foreclosures.
Get Foreclosure Financing in Order – Immediately
For those who are serious about investing in foreclosed real estate, it is absolutely imperative to get financing in order immediately. Make sure that there is a financing commitment from an appropriate lender in advance of any efforts to purchase foreclosed real estate.
When appearing at an auction or sale, it will be necessary to have not only the cash or cash equivalent for the initial down payment, but buyers must also be able to show that they have the financing necessary to consummate the sale at the time of closing. This requires ensuring that financing is available up front.
Perform Due Diligence on Foreclosed Homes
When it comes to knowing what is needed to buy a foreclosed property, do not underestimate the importance of “doing due diligence.” Just because money is being saved on the purchase of real estate through the foreclosure process doesn’t mean that steps should be neglected that are associated with any other real estate sale such as inspections, appraisals and so forth. Following these steps will help ensure that the real estate property is all that it is claimed to be, and can help ensure that a larger profit is made if it is to be flipped.
Many people who own properties about to go into a foreclosure status simply stop maintaining their residences. In a worst case scenario, some homeowners actually cause intentional damage to their properties out of anger towards the lender. In either event, potential buyers must know the actual status of the property beforehand so that it is known exactly what is being purchased.