Top 10 Things to Know About Foreclosure Property
If you have sufficient cash to buy a home, be sure to determine whether your needs are better met by using financing or buying with cash.
There are a lot of things to know about foreclosure property if you have never dealt with them before. There are tons of great deals to be had in the current market, especially in the West-Central & Birmingham Alabama area, but there are a few unique things to know about foreclosures to ensure that you’re making a smart investment.
What is a Foreclosure Property?
A foreclosed property – also known as Real Estate Owned (REO),is a home that was once customer-owned but has since been turned back to the mortgage holder as the result of a foreclosure action or acceptance of a deed-in-lieu of foreclosure.
Foreclosure is the legal procedure used by lenders to enforce payment of a mortgage loan on a home, when the borrower is behind on the loan. Homes that are foreclosed on typically sell for less than the actual market value of the property.
To find foreclosures, you'll want to work with an experienced real estate agent who has access to local multiple listing services and who can pinpoint the potential deals for you. If you’re looking for help in the West-Central & Birmingham Alabama areas, the DSEAYCOM team is here to help!
Be cautious and patient in the process of buying a foreclosure. If done right, you will find a great home in which you might gain some instant equity.
Also, read related: 5 Easy Steps For Buying A Foreclosure Property
Top 10 Things to Know About Foreclosure
1. Find Tradespeople
Because repairs are almost inevitable with foreclosed houses, it is recommended that you get to know a few tradespeople who can assess and repair damage from pests, mold and leaks. You should assume that the air conditioning needs to be fixed and possibly the heating system, too.
Many foreclosed homes need serious repairs; a home inspector can find these trouble spots. Once you are armed with this information, you can decide whether a particular foreclosure still qualifies as a bargain.
2. Buy from a Bank
Average bank-owned homes sold for 38% less than comparable homes sold at market-rate figures. This means that buyers can save a significant amount of money buying a foreclosure even if they don't do it at the auction level.The advantage is that you won’t have to kick out anyone living at the property, and you’ll be able to inspect the homes for damage and figure out how much you’ll need to set aside for any repairs.
The bank will likely hire a local real estate agent to put the home on the market. The longer the home is on the market, the more willing the bank is to work with you on selling price. Keep in mind, banks do not enjoy the business of owning real estate and they want to get rid of it as quickly as possible.
3. Home upgrades
Those willing to take the risk can use a home’s foreclosure status to their advantage, buying a larger property or one that is in a more desirable neighborhood than otherwise possible. You’ll find foreclosures in every price range – from starter houses to luxury mansions. Occasionally, the property is in great condition, ready for you to make it your home.
4. Financial gains
In the best scenario, buying a foreclosure property is also financially advantageous since the price you paid is below market rate. If the value of the home appreciates and you decide to sell, your investment could return even larger gains.
5. Property Condition
Most foreclosed homes are sold "as is." The lender will not make any guarantees as to the condition of the home or the component systems, such as the plumbing and wiring, and is not required to make repairs. You should be prepared to make repairs to any foreclosed home you purchase.
Here at DSEAYCOM, we can provide you with more information about foreclosure property to help you become a smart home buyer and enjoy being a homeowner once you’ve spotted a great deal. These things, plus help from a professional agent will give you an edge. When it’s time for you to make a move and buy a foreclosure property as your next investment, don’t forget to call the right team to ask for help.
At DSEAYCOM, we’re happy to answer any questions you have about buying and selling in the Alabama area. Call us now or feel free to share our contact information with someone you know that needs expert help buying or selling their home.
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