For the experienced investor, purchasing foreclosed real estate is a almost a guaranteed money maker. However, for those who know little or nothing about the industry there are some basic steps and information to look into before making any major purchases.
The obvious first step is to find a property. Foreclosure listings may be found on the internet through paid foreclosure listing sites, or by contacting local bank or real estate agent. Whichever method is used, finding a good piece of real estate to invest in is essential.
Obtaining financing is the second step in purchasing a foreclosed property. There are many creditors who will offer financing; however credible banks and credit unions are the best means of financing. Compare interest rates and fees of all lenders before committing to one financial plan.
During the pre-foreclosure process, the owner needs to be contacted, whether directly or through an agent. After which a government tax foreclosure sale or auction may be attended in order to bid on that particular piece of real estate. Before the auction, there may have a chance to work out a last-minute deal with the owner in default, which could also be beneficial.
Finally, making an offer is the last step in purchasing a foreclosed property. First time home owners and investors who have never purchased property in this manner are encouraged to hire or obtain assistance from a qualified agent. Based on research of the potential bargain, an offer can be made. The offer amount is typically somewhere below the market value but above the total outstanding liens and estimated repair costs. If the property is selling at auction, the person who has the winning bid will be required to pay in cash in the form of a cashier’s check at the auction. These are the basic steps to build on, when purchasing a foreclosed property, in order to make a sound investment.