A foreclosed property is seen as one of the best types of properties to be purchased. As a property that’s previously owned, you are practically buying a 2nd hand property – think of it as a used car which could not command a very high price because it has already put on mileage. This is also the same with foreclosed properties since it has been used for a good number of years and some things may need renovation in an instant.
But showing up with your real estate agent to buy a property blindly, is not a smart financial move. Here are the things you should consider while out hunting for a foreclosed property.
1. Survey the Area – the property may look like a castle but when you’re living in a very dangerous property, the fact that it really looks good doesn’t even matter. Research on some local news about the area so that you’ll have a good idea about the living conditions on the property you want to buy.
2. Visit the Property – even though you are purchasing the foreclosed property solely as an investment, you still need to visit the foreclosed property. You may not know it but the previous owner may still be there and refuses to leave. It’s also a good chance to check for renovations to improve the property value.
3. Get Pre-Approved – a foreclosed property may look like a good bargain but it could still cost you a large sum before you can call it your own. Get in touch with a few lenders to get pre-approved for an amount. That way you know the type of property you can afford.
4. Show up in the Bidding Process – don’t get disheartened if you can’t afford the price of the property, a foreclosed property could be up for bidding. Sometimes, the asking price of the owner may not be the same with the bank’s appraisal of the property.
5. Approach a Bank – of course a real estate agent should be able to get you the property that you want but if you really want a good bargain on a property go to the source. Banks are the one that could foreclose the property and have the power to sell or auction them.
6. Seek Referrals – on the other hand, if you can’t find a bank that could aid you in this form of property look for a real estate agent or a lender that specializes on foreclosed properties.
7. Play the Smart Waiting Game – you are not the only one looking to buy a foreclosed property. Although the waiting game is a good technique, don’t let the seller wait too much since they could sell the property to another buyer in an instant (especially investors).
8. Get a Contractor – when you plan to visit a foreclosed property, bring a contractor with you. The contractor will help you know the exact price you need to spend after you purchased the property. Since it’s a used property, some renovations are required and the contractor is the best person for an estimate.
9. Research, Research, Research – the worst thing that could happen to any property buyer or investor is to purchase a property without careful research. This could lead to purchasing a property at a higher than asked price.
10. Avoid Profit First and Seal the Deal – foreclosed properties are already in its lowest price possible and with recession, you can get a good interest rate. Focus on sealing the deal first as the profits will surely come once recession is over and the real estate industry will start to pick up.