Buying Distressed & Foreclosure Properties
Follow these easy steps to buying foreclosed properties
•1 Locate distressed properties through state, local and government agencies (HUD, Fannie Mae,
Freddie Mac and the Veterans Administration). You can also find properties through Internet
subscription services such as ForeclosureListings.com, banks, credit unions and real estate agents
who specialize in distressed properties. Most have designated representatives or departments that
handle foreclosures.You can also attend our Courthouse Foreclosure Auction meeting, they are held
every Thursday evening at our office, 5 pm to 7 pm. We even serve a light meal and refreshments.
•2 Contact the real estate agent or lender regarding the foreclosure you are interested in purchasing. They will have valuable information about the property, including the terms for pricing, down payments and possible interest rates.
•3 Inspect the property with a licensed, bonded, insured,professional. Although this opportunity is not always available, when it is, have an inspector check for all defects that can affect the value of the investment.
•4 Attend foreclosure auctions, which are constantly being held at sites all around the county. Before you go, you should have already viewed the list of homes that will be auctioned that day and visited the ones that interest you. You will also need to pay a deposit (usually 5 percent) by cash or cashier's check at the time of the sale. Locate nearby auctions at a site like USHomeAuction.com. At our Thursday meetings we show you what we consider to be the HOT buys , picuures, estimated REHAB costs, and return on investment.
•5 Evaluate the total cost associated with the property before you buy. In addition to the price of the property, you must also consider repairs, insurance, property taxes, liens and the amount you will be able to recoup either through the future sale or rental of the property.
•6 Make an offer to the lender based on your analysis of all costs associated with the ownership of the property. You must also consider that other investors will likely be presenting offers. You should take care not to overpay for the desired property, while still making a competitive offer.
•7 Decide on how you will finance the property. In some cases, there will be on-site financing available and you will deal with designated lenders, or you will need to go to a bank, credit union or mortgage company for you loan. However, if you want to become a regular investor, it's a good idea to establish a business or personal line of credit that you can access immediately, as foreclosures are often "cash-only" deals, and time is of the essence.
•8 Make certain that property you want to buy has a clear chain of title. Many properties may have had liens placed on them for which you may be responsible. You can check the chain of title yourself by visiting the local county clerk's office and requesting the appropriate documents (fees may apply). However, in most cases, you should utilize the services of a title company, such as Nationwide, to investigate the possibility of liens.