Looking for a sweet deal in foreclosures? Real estate experts share these valuable tips to help the would-be buyer.
Do an ocular inspection
Some foreclosed homes may just need a bit of sprucing up like a good paint job or wall patches, while some may be in dire need of costly repair. To be assured that a house will not require expensive tweaking, the best thing to do is to go for a personal visit. As added security, buyers may look at the Truth-in-Housing report which most cities require.
Determine the home’s worth
Not every foreclosure is a bargain. Agents advise consulting with skilled buyer’s agents first to appraise house value and negotiate the price.
Look and surf around for the best possible options
Many homes can be found in suburban and inner-city neighborhoods. One can also check classified ads and foreclosure listings on government, real estate, and sales agents’ websites.
Consider buying from a traditional seller rather than a bank
Purchasing from a bank can take a longer time since there are a lot more issues to settle like property conditions, inspections and financing. There are also more risks involved. Though states require realtors and sellers to disclose all home defects, an out-of-state bank may not know all the details. Few problems may also not be reflected in property inspections. To protect the buyer, agents advise buying the owner’s title insurance policy.
Avail of the Streamlined 203(k) Mortgage Program
Some banks may not accept offers from buyers availing of FHA financing. These sellers do not want to do the required work for a home to meet minimum property standards. FHA borrowers who are buying foreclosed homes in need of repair may choose to obtain the said mortgage program which places money in escrow to pay for certain upkeep such as new roofing or plumbing.
Remembering these tips will go a long way towards a good foreclosure investment. Best of luck!
Leticia Carvalho has been educated in the finer points of the foreclosure market over 5 years.