How to Negotiate the Best Possible Deal to Buy “Bank” and “Government” Foreclosure Properties?
Types of foreclosure homes for sale
- Real Estate Owned (REO) by banks (credit unions, private mortgage lenders and other financial institutions are also included wherever the term of “bank” is stated in this book) and government agencies
- Default pre-foreclosure deals
- Foreclosure opportunities at auction
You can create more value-added by buying foreclosure properties that need repair and rehabilitation
These real estate properties are:
- Fixer-upper foreclosures and
- Distressed properties (bank repossessions, conversions, mismanaged/neglected/abondoned properties)
Look for foreclosure properties that need repair and improvement if you are a handyman or have a good contractor or handyman friend. You can also have good deals when you buy foreclosed homes from the people experiencing financial difficulties. Notices of default are good sources of finding such people as we detailed in pre-foreclosure deals section.
Foreclosure Home Buying Tips
Buying foreclosure home as your residence makes a difference than buying a house for real estate investment. Government agencies and most lenders give you favorable treatment when you are buying a foreclosed home for residence. HUD, for instance, gives priority to buyers who intend to buy foreclosure property for residence. See Housing and Urban Development (HUD) foreclosures for specific information later.
Advantages of foreclosure home buying: cash flows, tax deductions, and appreciation.
Make yourself familiar with home inspection tools and techniques so that you do not have any problem in the property before you buy. This is called buyer’s inspection or pre-purchase inspection. After learning these home inspection techniques in later chapters, attend a professional home inspection once and you are set to go for your all future foreclosure home buying transactions.
Important factors in buying a foreclosure home
- Price per square foot to compare
- Length of time in the market
- Number of rooms (three bedrooms with two bathrooms being standard)
- Age of the foreclosed property and the roof
- Its neighborhood: Criminal activities, recent changes in infrastructure, and traffic and transportation patterns
Get specific information on: