If you are an investor or a first-time homebuyer considering taking advantage of the low prices of foreclosure properties, then check the following guidelines:
Research your local real estate market.
Look for foreclosure listings in your local newspapers and on web sites. Compare current and previous weeks’ prices. You will see how the prices are declining and if they are bottoming out. If you see the same prices appearing for the same houses for some weeks, then probably prices have bottomed out.
Check also if there are news about continued addition of new foreclosed properties to the housing market. Rising inventory means possible further reduction in home prices.
Be ready with your financing.
As most everyone knows, you have more leverage if you have ready financing. The owners of the foreclosure properties can give more consideration to your bid price if they know your financing is in place.
Check foreclosure properties owned by the U.S. Department of Housing and Urban Development.
The HUD might have properties that are priced much lower than foreclosed properties held by banks. Nevertheless, consider also the fact that banks are more strict in implementing foreclosure policies, hence you can be sure that their properties are free of liens and claimants.
Take advantage of the deep reduction in mortgage rates.
If you are a first-time homebuyer, then you have at least three factors working to your advantage. They are lower interest rates, lower-priced foreclosed homes and federal programs aimed at helping lower-income families acquire their first homes.
Negotiate directly with the owners of foreclosure properties.
If you believe that you have adequately researched about foreclosure and home buying processes and pricing trends, then it is more cost-effective to approach banks, pension funds, insurance companies about their properties for sale than to hire an agent.
Leticia Carvalho has been educated in the finer points of the foreclosure market over 5 years.
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