Many do not succeed in buying bank owned properties due to lack of proper planning and preparation. Buying distressed homes requires a lot of perseverance and prudence as the market is replete with these properties. One would need to personally check the property, probably with an inspector, and not merely rely on descriptions and pictures. An inspector can give you a clear assessment of the cost of repairs, a value which you should include in your computation of the home's total value.
A buyer should also prepare his means of paying for bank owned properties. If you are not buying with cash, you must be pre-approved for a housing loan as most sellers will look for this when you make your offer. The loan pre-approval document will also give you an idea of the amount of loan you may take out. This would directly impact the type of home you can purchase.
Searching for Distressed Properties
Once you have secured a pre-approval you may begin looking for a home you can buy. The old way off seeking out these properties is through local real estate companies and newspapers. A more efficient way of finding foreclosed properties is through online listings of foreclosures. These listing services can enable you to scour through a comprehensive database of distressed homes offered across the country.
Honing Your Negotiating Skills
If you have settled on a short list of properties you want to consider closely, get in touch with the property managers or the seller and express your intentions. The foreclosures sector favors buyers and you can expect sellers to be flexible during negotiations. They will be open to requests for discounts, perks and incentives. In fact most of them will offer these as part of their efforts to push the property to buyers. Maintaining an inventory of foreclosed properties can be a steady drain on the capital and sellers would want to be rid of these properties as quickly as possible.
There are also options for buyers of bank owned properties who are into starting housing projects because there are numerous fixer-upper homes that require more tender loving care from buyers. These homes disappear from the market quite fast because they are more affordable than your regular foreclosures. It is prudent to act quickly while not missing the finer points and the risks.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.