It is hard to believe that a house that just two years ago was purchased for $270,000 is not available from the bank at $70,000 but that is the case and $200,000 in value just disappeared in the time it takes for you to sign the contract. But that is what has happened and that $200,000 is what the government has had to give to the banks to bail them out but we can leave that for another article. Getting to the point of buying that house for $70,000 is not as easy as it sounds. Finding a foreclosure property, getting financing and wondering whether that $70,000 house will be worth $60,000 next year … it is not easy.
Of course, nothing worthwhile is. Pulling the trigger on that new investment or home of the future is very difficult and hesitation is something that you can’t have when you are trying to buy a foreclosed property. Buying foreclosures isn’t for everyone and not for the person who wants to “think about it” for a while because you are competing against seasoned investors for that foreclosed property.
So how do you go about buying a foreclose property?
Before you look for a specific property or speak with a real estate broker you need to what you can afford. Now having just gone through this I can tell you that you are in for a shock. Not only are the requirements tighter than they were just a few short years ago they want backups of everything that you present to them and then they want the backups confirmed. The loans to buy foreclosures are out there, but be patient as they will try your patience while you are spending your days at Kinkos copying taxes records and paycheck stubs.
Let assume that you can get a loan and you have a general idea of where you want to buy this property now it is time to befriend a real estate broker. First, almost every bank has listings now of all their foreclosed properties online and this is a great place to start but now you need to get to the broker and this is where it gets challenging. You are buying a property that 2 years ago sold for $270,000 and now you want to spend $70,000. Remember, the broker gets commission and 6% of the current price is a lot less than it was 2 years ago. Basically you want to be taken around to see the house and the broker wants to give you a picture. Add to the equation that there are a lot of real estate investors that are buying foreclosures and they can act fast and sometimes without seeing the foreclosed property. You need to be decisive when speaking with a broker. You need to do the legwork yourself and that may mean peaking in windows of the foreclosed house. You need to be prepared and when you speak with them let them know you are approved for the loan and that you want to act quickly. Looking for buy a foreclosed property and browsing aren’t words that go together too well with brokers.
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As there are so many variables when you want to buy a foreclosure property, it is hard to go through every option but the one constant is that you need to be able to act fast. Even when everyone else around you is dragging their feet … you cant or you will miss out on that dream house.
Tags:
Foreclosure,
Real Estate