Phong Cao

What Should You Know About Buying A Foreclosure

Have you ever thought of buying a foreclosed home? If your answer is yes, there are some important factors you should consider before investing. Foreclosures generally occur when the owner of the property defaults on their mortgage. This often results in the home being listed in a foreclosure auction. If no one bids on the property, it then becomes bank-owned. Many investors choose to purchase foreclosed properties as an investment property because they can be bought at prices below market. While this incentive can potentially bring a very profitable return on their investment, one must keep in mind that buying real estate from a bank or financial institution is very different than buying from a homeowner. Here are a few things that investors should keep in mind while considering a foreclosed home for an investment property.

Many foreclosed homes are priced to sell – on an “as-is” basis. This can create an opportunity for a great deal, but can also break your investment. For instance, if you purchase a foreclosed property “as-is,” you’re getting the home in its current condition – this could mean big repair costs at your expense. Other expenses to consider are the closing costs on the home – many banks will not pay those costs. If you are allowed to inspect the property, use this advantage to hire a good inspector. A good inspection can help you calculate and consider any costly repairs that need to be made to the home before turning it into an investment property – it can also help you determine if the property is actually worth the investment.

While you’re shopping for a great deal on a foreclosure, consider hiring an experienced agent (me). An agent with foreclosure experience can help you find the best deals by locating properties that may not be listed as foreclosures due to bank advertising restrictions. I have the ability to help you understand our state’s laws when it comes to purchasing a foreclosed property.

As an experienced agent, I can also assist you in critical research regarding comps – recent sale prices of homes that are located near or within the neighborhood of the property – and tax liens and other matters. In today’s housing market, it is extremely important to do your research – know exactly what you’re getting into by outlining the benefits and the risks on the purchase of a foreclosure before you sign on the dotted line.