Foreclosure properties have always been a little esoteric, and in years past you had to attend a sheriff sale or auction (with check in hand) to have a shot at getting one. Since they seldom made their way onto the open market, you had to have some inside information and deep pockets, and you had to act fast.
You still have to act fast—it's a competitive market—but because of the large numbers of foreclosures and distressed properties on the market, they are easier to find and easier to buy. Tapping into this market doesn't have to be an intimidating process, and you don't have to be a millionaire to do it.
Finding the deals
Banks are in the business of lending money, but in recent years, they've been put in the position of being in the real estate business. Bankers of course, don't want to spend their time trying to sell properties they've acquired through foreclosure—they just want to lend out money, and collect payments, interest and fees. But over the past few years, their portfolio of properties has skyrocketed. As a result, they've made it easier for you to find those properties and make offers on them. Foreclosure lists are easy to come by (and no, you don't have to pay somebody a big subscription fee to get them). It's just not in the banks' best interest to keep these deals hidden—after all, they want them out of their portfolios.
Homeowner paradise
Foreclosures are no longer simply investment vehicles. In fact, the glut of foreclosed and distressed homes is opening up a window for more renters to become homeowners than ever before! Homes today are affordable across the board, and picking up a foreclosed property can net you a deep discount off of an already low price. Programs like the "First Look Initiative" put in place by Fannie Mae and Freddie Mac are geared specifically towards homeowners looking to buy a primary residence. What this deal does is gives prospective owner-occupants the first crack at a foreclosure, before the investors come in and start bidding. Isn't that great? That means you don't have to worry about an investor with deep pockets coming in and outbidding you for your dream home! And that's not all, the program also provides homeowners with an opportunity to put down as little as three percent, with a good interest rate—and you can also finance in any repairs and upgrades you want to make into the same loan.
Be prepared!
There's no doubt you can find great deals today, but if you're looking at foreclosures, short sales and distressed properties, there are a few things you need to do to be prepared. Buying a foreclosure is a little different. But keep these three things in mind and you'll ready to deal:
2. Work with a real estate agent who is skilled in the foreclosure market. Not all real estate professionals are familiar with the special processes involved in purchasing foreclosures, short sales and distressed properties. We specialize in foreclosures and are ready to guide you.
3. Have contractors ready to inspect homes when they become available, so you know what needs to be done ahead of time.
Most importantly, remember that if you're looking at a house that's in good condition and it's being offered at a below market price, chances are you're not the only one. If you're prepared—and if you have a real estate professional ready to spring into action to seal the deal for you—you'll have a much better chance of getting the home you want, at the price you can afford.
There's no reason to wait. The foreclosure and short sale market is hot. I encourage you to contact us today, and we can get you set up with a list of available foreclosures so you can start looking for the perfect home.
Here is Michael's interview on the news!
