If you’re thinking about saving on property by purchasing a foreclosed property or a short sale, you should tread cautiously. To ensure you’re getting the most out of the deal you’ll need to do your research both on the property and that sort of transaction.
Since the number of short sales and foreclosures are decreasing you should also be aware that there’ll be greater competition. These tips should help you get started.
- Rely On The Expertise of an Experienced Agent. Ideally your agent wont just have significant experience in real estate, but also significant experience with distressed property.
- Be Patient. The process of purchasing foreclosed property is a lot longer than purchasing ordinary property. Besides that finding the right home is already quite a lengthy process.
- Check the Market Value. Just because it’s a foreclosed property or a short sale, doesn’t mean you’re getting a deal. Check to see if the home is selling below market value and that any repairs or renovations you need to make will be affordable.
- Conduct an Inspection. A great price could mean the house might have serious issues, so have a licensed inspector check out the property. Include a contingency clause in the offer in case the inspection reveals major defects.
- Research Liens on the Property. Find out who is the primary lien holder and whether any other liens are on the title.
- Ensure Your Financing Is In Order. You may have less than a month to close once the contract is approved, so it’s critical that your lender has your financing in order.
- Continue Your Search. You may love the house you have made an offer on, but realize that until you sign the papers, it’s not a done deal. Keep looking so that you have a back-up in case something goes wrong.
To avoid disappointment you need to research the in-and-outs of buying distressed property. Find the right estate agent and be prepared to be patient.