If you are a first-time homebuyer, this article probably isn’t for you – but…
…it could apply somewhere down the road. Please, read on and share!
Foreclosures are a special variety when it comes to home buying. Foreclosures come in all shapes and sizes. They can be any layout or style: traditional, contemporary, single family, townhome, condo, duplex, etc. Foreclosures exist in any neighborhood, high or low dollar. If you’re in the market for a foreclosure, chances are, you are an investor or someone who’s looking to put in some sweat equity. Here are some advantages to purchasing a property in foreclosure.
1. Well the good news is, if it’s a foreclosure, that means it is bank-owned and you can bet your bottom dollar that the bank will be motivated to sell the property. (But don’t bet your bottom dollar, you will need it for the foreclosure!) The banks don’t want to be in the home ownership business, they want to be in the mortgage business. Typically, they’ll negotiate on price, closing costs, escrow length, etc. Usually an investor will use a cash buy to leverage all the above. An aggressive approach by your real estate professional will get the job done quickly and cost-effectively.
2. The title will be clear – this means there are no liens, mortgage or back taxes of the prior owners to the buyer.
3. Inspections and mortgage financing are allowed within a standard period of time. Use this time for due diligence because another sure bet is, this property needs some TLC. The bank will not make repairs on most foreclosed properties. Prepare to spend some money on repairs and improvements that may be needed for future rental or flip potential. The bank will not
4. High ROI and appreciation – because the bank will list at below market value, when you purchase at the right price, you could potentially enjoy a quick ROI.
1. Foreclosed properties are vacant – could be several months which means no utilities service. Lawn isn’t watered, pool filter isn’t powered, home isn’t tended. You must buy at the right price and earmark monies for cleaning/repairs/fix-up. Bringing this home back to “presentable” will cost money.
2. Competition – more than one investor vying for the same property will drive the price. Know your “no deal” number and stick to it.
The Ugly - that’s all – the house just might be ugly with a capital UGH! Distressed even! Reference #3 under “The Good”: Prepare to spend some money on repairs and improvements that may be needed for future rental or flip potential.
Again, Foreclosures can be a little complicated and certainly, there are variables that come into play that make this endeavor a bit riskier than a traditional real estate transaction. But foreclosures can be a wonderful opportunity for the right investor being represented by the RIGHT realtor.
Are you ready to buy or sell? We are your one stop shop for real estate. Simply put, there is no need to search elsewhere for your dream of buying or selling a home!
Call me today!
Steve Maxwell 480-226-8375.
Your real estate agent for the Southeast Valley of AZ
Serving the greater Phoenix area and more.