Foreclosure Buying Tips For 2019: What To Look For When Acquiring A Foreclosed Property
When people buy a home, either for themselves or for flipping houses, it’s typical to search for online listings and even ask the assistance of a realtor to help with the finances, paperwork and closing costs. However, this isn’t the case when you’re buying a foreclosed home. It’s a bit different, and somehow requires a bit of a grind. But this doesn’t mean that you shouldn’t do it – foreclosed homes are a great option since they’re significantly priced lower, but it takes a bit of time and knowledge to be able to land the perfect home. Here are some foreclosure buying tips for 2019, as well as some pointers to take into consideration on what to look for when acquiring a foreclosed property.
1. Skip the listings, find a real estate broker.
One of the most important things that you have to remember when buying a foreclosed home is not to initially look for a house, but to find an experienced and reliable real estate broker. While you’re at it, you also have to start looking for a lender, whether it be a bank or a third-party company to back you up with funds you need to buy the home.
The great thing about real estate brokers is that they have a long-term relationship with banks, which means that they have access to most of the listings out there in the market. Make sure that you communicate well with your broker, discuss what you’d like to purchase, your needs and even let them know if there’s a specific property you have in mind. Even if it’s not in the database, let the broker know because it usually takes about 24-48 hours before it goes live.
2. Acquire a pre-approval letter.
If you’re going to pay in cash, you can skip this step. However, if not, you’ll need to request this from your lender. This letter usually indicates how much money you’re borrowing, depending on your credit score and lender’s assessment.
3. Review the recent sales prices of comparable properties.
You may have heard about this or know this as ‘comps’ – this is a crucial step to help you figure out the current house pricing with the current market conditions. Check the comps and give a competitive offer based on the comps.
4. Don’t hesitate to bid a higher price.
If the house is priced reasonably lower based on your assessment, and people are starting to bid higher prices, don’t hesitate to bid a higher price as well. This is a case to case basis, however. Prices may vary depending on the location and home’s condition – so expect more bids to come if you’re after a foreclosed home that is still in great condition in a good location.
5. You buy the home as is.
Bear in mind that homes are sold as is whenever you’re buying foreclosed properties. So if you’ve seen some areas that require repairs, you’ll have to pay for it and you won’t get discounted prices based on it. Sales are final and you’re buying the house, regardless of the condition. This is something that you have to keep in mind to help you decide whether it’s worth bidding for a higher price, or start moving on to another property.
Hopefully, these foreclosure buying tips for 2019 will help you find the right home with ease. Stop making mistakes that others did – start with a broker and take it from there.