5 Tips for Getting the Best Foreclosure Home Deal
Foreclosure is actually what happens when a homeowner fails to pay the mortgage. More specifically, it’s a legal process by which the owner forfeits all rights to the property. If the owner can’t pay off the outstanding debt, the property then goes to a foreclosure auction. Let us look at the 5 tips for getting the best foreclosure home deal.
These foreclosure homes are quickly becoming attractive to real estate investors. The first-time homebuyers are the most culprits in this. However, if you have never invested in distressed properties it’s important to understand the pros and cons of this type of real estate transaction. Great foreclosure homes can be found, but it’s extremely rare to find one in perfect condition. More often than not, you will need to either engage in getting the property back in good condition.
The following are the tips for getting the best foreclosure home deal;
1. Do thorough due diligence
Sometimes you may prefer to conduct real estate transactions without the assistance of specialists, be certain to do your homework. Investigate the area to determine the market value of other homes and property value growth. After conducting research, it’s time to compile a list of potential foreclosure homes. When working with a Realtor, your agent will make viewing appointments for you. If you’re working alone, you will need to contact the seller to make an appointment.
2. Obtain a pre-qualified financing
It is a good idea to obtain pre-qualified financing before you begin looking at distressed properties. Unless you can pay cash for foreclosure homes, then you don’t need this. Doing so will ensure you are qualified to buy the property. Realtors and REO specialists can help you locate foreclosure homes more efficiently than if you search for them on your own. These professionals have access to many thousands of distressed properties. They can help you quickly locate a house in the area where you wish to reside or purchase a home.
3. Work with a realtor/private real estate investor
If you have never purchased a foreclosure home before, it is best to work with a realtor or private real estate investor. This is the person who specializes in this type of real estate. Working with a foreclosure home specialist can provide you with greater bargaining power. This will help you obtain additional benefits such as reduced closing costs or a lower purchase price.
4. Determine whether there is any lien against this home/property
Be certain to determine if there are any liens against the property. Creditor and tax liens can be a huge legal hassle that consumes a great deal of time and money to resolve. Avoid homes that have any hint of any lien attached to them.
5. Document potential problems
Have a pen and a paper, video or digital camera so that you can document potential problems. Check the house from top to bottom and make note of any structural damage, plumbing or heating issues, and record all the problems. This will help you so much when going to negotiate with the seller.
The more problems you can find, the better your bargaining power. Don’t skimp on the process and take time to thoroughly investigate the house before you make an offer. Doing so could potentially save you greatly and reduce the purchase price.