As foreclosures rise, so do opportunities.
In the midst of housing market slump “foreclosure” is becoming more common word in our vocabulary. For some people, foreclosure means misfortune and for others, it can mean opportunity.
While the crisis continues, real estate brokers and mortgage lenders see the problem as potential opportunity for buyers. Of course, the draw of foreclosed homes, especially to first-time buyers, is the lower price.
New online foreclosure sites offer buyers a wealth of opportunities. Foreclosure.Fizber.com showcases a growing number of properties in pre-foreclosure and foreclosure, a phenomenon that is becoming far more common with the US sub-prime mortgage meltdown.
They pull together thousands of listings based on public information and add photos or aerial images, eliminating the need to sift through court documents. They also offer phone numbers of homeowners and court dates.
So, a foreclosed home is basically a property that a bank wants to sell quickly, and is thus a good investment opportunity. But how does one go about buying a foreclosure property to capitalize on such an opportunity?
Here is the basic process of buying foreclosure homes … by the numbers.
1. Tracking Foreclosures In Your Area
Before you can buy a foreclosed property, you have to know it exists. Right? Right! So the first step to buying a foreclosure is to start tracking them in your area.
There are several foreclosure-tracking services you can use. We recommend using Foreclosure.Fizber.com. Remember, the key to buying foreclosure properties is to stay on top of the market and move quickly when they become available. So you need a tracking service that will enable you to do this.
2. Signing Up for Foreclosure Tracking
Once you’ve found a tracking service that meets your needs, you will sign up and enter your geographical information (the area you want to monitor for foreclosure listings).
3. Learning Your State’s Laws
Foreclosure proceedings and laws can be complex. So before you start bidding on foreclosed homes you should do some homework on your state’s foreclosure laws and procedures. Start by using Google or another search engine to research “Foreclosure laws in [your state].” Be sure to consider the source when conducting such research 0 the closer you get to the source (your state government), the more accurate the information.
4. Choosing a Foreclosed Home to Invest In
Like any other type of investment, buying foreclosure properties carries a certain level of risk. If you buy a foreclosed property that later proves hard to sell, you will be stuck with a mortgage payment longer than you want. Additionally, if you pay too high for the foreclosure, you will reduce your profit potential on selling the property.
So how does one purchase a foreclosure property while minimizing risks? What are the safest deals to go after? Well, like anything else in real estate investing, this is not a black and white issues. There are many factors to consider.
Generally speaking, however, bank-owned properties carry the least risk for investors seeking foreclosed homes. When the bank takes ownership of the foreclosure property, you know that there are not taxes or liens to contend with, and that the home is empty of homeowners.
5. Making Your Offer / Bidding on the Property
So you’ve investigated a particular foreclosure property, line up your financing, and you’re ready to bid on the home. This step normally involves bidding at a foreclosure auction, or submitting a sealed bid to the owner after the foreclosure sale. The key here, once again, is not to bid too high on the foreclosed home. The closer you come to paying the full assessed value of the home, the lower your profit potential on reselling.