Three Great Tips On Buying A Foreclosed Home

Posted by bpaul as Real Estate

Meet the latest desperate home seller…The Bank. According to RealtyTrac, lenders repossessed 197,800 homes in the first four months of 2008 vs. 90,800 in that period last year.

Banks don’t want to be in the real estate business, so sometimes they’ll accept much less than you might think to get the darn things off their books - especially in markets having lots of trouble. But buying such properties has drawbacks.

Here’s what you need to know.

1. Use the Web

Websites can help you find foreclosed homes. On Redfin.com, you can do a free search for so-called real estate owned (REO) properties - those for which the bank holds the deed - in Baltimore, Boston, Los Angeles, San Diego, San Francisco, Seattle and Washington, D.C. (and soon, Chicago).

Or you can locate them nationwide on Foreclosures.com or RealtyTrac.com for a subscription fee of $49.95 a month.

2. Use a broker

Forget buying directly from the bank (lenders typically deal only with pros) or at auction (you may wind up bidding more than you should).Work with brokers; banks use them to sell most homes. Once you’ve identified which properties are REO, you’ll know those are the ones for which a low-ball offer is more likely to be accepted.

3. Watch out for repair costs.

Look for houses that have been on the market for more than 90 days and offer. Bank-owned houses typically need a lot of work: People facing foreclosure often neglect maintenance and may have swiped fixtures and appliances on their way out.

Never buy an REO property without an inspection, and be sure to factor repair and remodeling work into your offering price. According to a recent survey by Remodeling Online, replacing a bathroom alone costs nearly $16,000, on average.

To view entire article go to CNN/Money

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Moolah

4 Responses

Benjamin Dougan

June 29th, 2008 at 5:06 pm
1

Buying a foreclosed home can save a new family a lot of money. Many people don’t exactly know how to start a process of getting a foreclosure and this article is extremely helpful. The housing market is bad right now and many people can’t afford their mortgages. There are a lot of foreclosures available on the market right now.
Brandon

June 29th, 2008 at 8:25 pm
2

I would be cautious about jumping into the foreclosure market since there are so many uncertains in the current market and we can’t be sure the market has even reached bottom. Getting into a foreclosure may make sense if it’s for a primary residence and will be held for many years But I think it woul be foolish to jump into the foreclosure game in an unstable market in places like California, Nevada, and Florida without careful consideration, especially if your intentions are to make a quick buck by flipping the house. The markets are so bad in many of these areas that you may be stuck with a purchase you can’t easily unload.
Travis

June 30th, 2008 at 3:35 am
3

This article is pretty helpful. Brandon is right though, the market is fairly unstable right now. But with that risk comes an opportunity for a great deal, so I suppose many might find it worth the risk.
Trish

July 7th, 2008 at 12:35 am
4

Anyone that says the real estate market is bad, is crazy !! If you have the ability to buy right now, DO IT !!! These banks that have foreclosed DO NOT want these houses; they want money !! You can get deals now that may never be available again.