Why Buying a Foreclosed House My Be Your Best Bet As a Home Buyer

The housing market is cyclical and it currently is on a gradual rebound from the real estate collapse of 2008. The number of foreclosed properties is fewer than a few years ago, but there still are opportunities to buy a foreclosure at a respectable price.

Don’t know what you’re doing, don’t buy

Buying a foreclosed property is not for those who haven’t studied the foreclosure process as fully as possible before shopping for a foreclosure (aka real estate owned, REO, bank-owned). Study available online information, take community college courses, and attend seminars on investing in foreclosures.

Line up your financing ducks

The next step toward purchasing a foreclosure is to develop a detailed budget. Determine the absolute maximum you are willing to spend, including mortgage, property taxes, and insurance. Include some funding for potential repairs.

Then research REOs in your real estate market of interest.

Many foreclosed homes are in need of at least some rehabilitation. How much are you willing to spend on repairs? Are you planning to do the sweat equity or will you need to hire a contractor and crew to do the work?

Now look at your budget and list what you can afford to put into a down payment and earnest money. Will you have to take out a home loan?

Having the financing lined up before you place your bid on a foreclosure indicates to the selling financial institution that you are a serious buyer. Be aware that most REOs require this information along with your offer.

Be prepared to honor your budget and if the deal doesn’t come in under your limit, be prepared to walk away.

Buy smart

Some REOs are priced over market value. Know what like properties are selling for in the area. Several online real estate organizations list “comps” for the property in which you are interested as well as similar properties.

The REO bank typically doesn’t offer disclosure on a foreclosed property. Some homes are in terrible, even uninhabitable, condition. DO NOT consider, much less place a bid on, a foreclosure without first having a thorough property inspection completed by a licensed inspector. And be very cautious of any property that is listed significantly below market value. It may be hiding some serious issues.

Don’t go it alone: work with a real estate agent who has plenty of experience with foreclosures.

The good deal

A good deal in an REO property is one that needs little if any restoration. Or, it could be the rehab property that falls well within your budget and financing.

A stronger deal is the one for which you can pay cash. Be prepared to act quickly. Bidding wars on a desirable property can be common. Don’t lowball your offer. Make it clean, in cash (if possible), with few or no contingencies, and a quick close.

The best bet on a foreclosed property is the one for which you prepared – even before you began your search.

Free List of Foreclosed Homes – How to Search Foreclosures Without Paying Membership Fees

Finding high quality free foreclosure listings is one of the most challenging parts of getting started with foreclosed homes. Fortunately, there is a easy way to browse all of the currently available homes in your area, on the biggest, most trusted foreclosure websites, without paying for any membership fees. Read on and you will be a foreclosure pro in no time!

How Do I Find Foreclosures for Free?

If you are thinking about buying a new home, or investing in the real estate market, you will definitely want to check out a list of all your local homes in foreclosure. These foreclosures are owned by banks, which have taken possession of the property due to the previous homeowner’s inability to keep up with their mortgage. Once the bank has possession of the home, they will attempt to quickly sell it, often at a price that is up to 60% below market value.

The best route for finding these deals is to search online foreclosure listings to see what is available in your area of choice. These websites will commonly have millions of home listings, in all cities, states, and neighborhoods across the country. Browsing these websites is by far the best way to locate all types of foreclosures.

How to Access Foreclosure Listings for Free

The main factor that keeps beginners from accessing these websites is that they all charge a monthly membership fee to view their listings. So how can you view these listings without paying for a membership? Well, luckily most of the major foreclosure services let you browse their sites for free by signing up for a 7-day trial membership. This will give you full 100% access to all listings, prices, addresses, and photos for a full week, allowing you to satisfy your curiosity and decide if foreclosures are right for you.