Foreclosure Homes for Sale
Homes foreclosed by banks and government agencies offer an excellent opportunity to expand your real estate investment portfolio. Time is now!
Advantages of bank foreclosures
Banks want to stay away from foreclosures. Real estate is not their primary business.
- You get a clean title. Bank is the legal owner of the foreclosure property. You do not deal with the original owner and to evict anybody.
- You do not need to worry about taxes as the bank has already made such payments when it owned the foreclosed property.
- You do not need to rush for appraisal and foreclosure home inspection.
You will have enough time to do whatever you want to make sure that it is a good real estate investment for you. You may even ask for a loan from the same bank to finance the foreclosure investment property.
As buying any other real estate, you can always add contingencies as conditions to buy foreclosure properties. See foreclosure contingencies for complete listing.
Critical issues in buying foreclosure homes
Owners of foreclosure homes generally neglect repair and maintenance due to financial problems and their psychology. Consider the following before buying a foreclosure property:
- Thorough foreclosure inspection that you can do before assigning it to a professional home inspector.
- Read popular foreclosure newsletters to avoid serious common mistakes made in buying foreclosure houses.
- Try to specialize in one particular type of foreclosure in the beginning. Start with pre-foreclosures, bank foreclosures, government foreclosures, probate homes, or foreclosure auctions.
- Decide on foreclosure property types: in general, single detached homes appreciate more and give you more freedom. Condos and apartments may appreciate less due to some restrictions and homeowners’ association (HOA) fees.
Bank foreclosure process
Bank owns a foreclosure home when the owner cannot pay back his or her loan installments in three consecutive periods.
When the bank gets the deed of the foreclosed home, selling it as soon as it is possible is its top priority as it needs the money, not the illiquid foreclosure property. Any amount that you offer over the amount of mortgage loan will make the bank happy.
Banks love people who know what they are doing. Prepare a simple plan summarizing your actions after you buy bank foreclosures and show your profits. This will make the bank feel comfortable as they want to make sure that you will be able to repay the money you borrowed.
Some banks offer free bank foreclosures listing and also provide financing.
Government Foreclosures
The best part of government foreclosures is the fact that the government agencies are not interested in making profit in selling foreclosure properties. They want to get rid of them as soon as possible. They simply want to replenish their resources to insure new home loans.
Government agencies such as HUD (Housing and Urban Develoopment), VA (Veteran's Administration) and others are willing to help you in finding financing and give you allowance for repairs, if any.
You can create a lucrative real estate investment business by consistently investing in government foreclosure homes offered every single day.
If you do not like foreclosure repair, look for properties that only need cosmetic repair. If you intend to fix up the foreclosure property or you have a handyman friend, consider government foreclosures that need extensive repairs. You need higher profit margin to justify the cost of repair and your time. Consequently, you make more profit.
How to find government foreclosure homes?
- Focus on one area where real estate property values are going up and that you feel comfortable with.
- Gather as much information as you can. Review free government foreclosures listing before you commit yourself to paid foreclosure listings.
- There are foreclosure listing companies that offer free listings of government foreclosures. Try free trial before you commit yourself to one-year or monthly subscription.
- Review the prices of comparable properties in the same area. Try to figure out how much money you can make after you complete the repairs.
- Before you make your offer, set a ceiling price for government foreclosure home. Make sure that there is no additional cost item other than repairs. Do not get crazy about getting the first government foreclosure property. There are plenty of them. Never exceed the ceiling price that you set.
Foreclosure home opportunities are everywhere
There are so many people who want to get the list and try their chances. Some are not serious; some are looking for bargains at unrealistically low prices.
Lenders, HUD, VA, Fannie Mae, Freddie Mac and some other government agencies prefer to sell through real estate agents for this reason. You have to bid for the foreclosure property with the help of a real estate agent. They don’t want to disclose their whole list to those who may not be experienced enough to handle the transaction.
You may always ask for most recent appraisal report or pay to get foreclosure appraisal report if you are really serious about buying a particular foreclosure house.
Stop by vacant properties and get some information from neighbors. If it is not listed in the Multiple Listing Service (MLS) it is good news for you. This means that you will have less competition.
Strategize and start your bank and government foreclosure investment program today!