Guide To Buying A Foreclosure
There is no question – now is the time to buy a house. Foreclosures are at an all-time high and their presence in the many markets creates a feeding frenzy every time a new one comes up for sale. These homes are listed in every section of the market and are often in very good shape structurally; some only need light cosmetics (think paint and carpet). Like anything in life, it pays to be prepared. Here are some tips to make your experience as profitable as possible.
1. Be Ready – Foreclosures are cheap for a reason: banks want to sell them fast. In many cases banks will find buyers within 3 days of their initial listing. If you know you want to buy then be ready with a mortgage preapproval before you start looking; banks will require proof of financing before they will consider your offer, no matter how strong your offer is.
2. Do Not Be Afraid To Get Your Hands Dirty – Some foreclosures are in great condition but, by and large, you are going to have to invest some sweat equity to get your new home habitable. Do not let the cosmetics scare you away; look for strong structural components like good floorplans, great neighborhoods (remember: location, location, location), and newer roofs. You can change the carpet – you cannot move your house.
3. Inspect, Inspect, Inspect – Banks will not generally make any representations (or guarantees) about the property you are about to purchase; use some of the money you are saving when buying a foreclosure and get the best professional inspectors you can. A little investment up front can save you a LOT in repairs after purchase.
4. The Asking Price Is Often Very Close To The Selling Price – A really common misconception is that banks will take huge cuts in their asking prices for every foreclosure. Much of the time, this is wrong, wrong, wrong. Banks have specific guidelines about what they will and will not accept and they know that if you do not buy it today then someone else will look tomorrow. This is especially true with homes that have a lot of appeal. If you really like your house, make a reasonable offer and BUY it!
5. Most Importantly, Use a Realtor. The right agent can let you know about new foreclosure properties that fit your needs as soon as they come on the market, not to mention help you navigate the mountains of paperwork and negotiate a better price with the bank. The agent will also have the working knowledge to help you avoid buying a lemon. And, best yet, the realtor is free to you because the bank pays the commission.
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.
Alex Krumm is a professional Realtor living in sunny Sarasota, Florida and a partner in Sarasota Property Group. Check out the most useful and innovative Property Search Tool in the world, Brand New and incredible!


























































