One man's trash is another man's treasure. While home foreclosure can be a tragedy for many, it can also be a blessing for others. Food prices are not the only prices that continue to rise. Residential properties are slowly increasing in value. House prices also vary from one place to another. Due to this, some people take advantage of foreclosure auctions.|
Foreclosed homes can be the answer for those people who simply cannot afford a new home. In many cases, these homes are sold for a fraction of their real price when sold in the regular real estate market. People can also take advantage of the lower prices in order to use the purchase of these homes as investments.
Frequently, repossessed houses require extensive repairs. This situation is not uncommon and may seem quite daunting. It also can work to your advantage. The poor condition of the house could have been caused by any number of reasons. The previous homeowners may not have had the means to maintain the houses. Some of these houses may also have been abandoned by their previous owners. When this happens, it leaves the mortgage lender no choice but to dispose of them as quickly as possible.
Do your homeworkBefore you buy, you need to make sure that you're going to get a good deal. The biggest part of the deal is adding up all the expenses to see if it is indeed the deal you thought it was. You may have to do a little bit of research first to be able to see how much you will have to spend in buying and repairing the property.
If you are short on cash, you can get a loan, (in some cases you can get an assumable loan). Talk first to loan officer or mortgage broker to see if you are qualified. If you are qualified, gather the information you will need.
You should be able to find several lists of foreclosure homes, or homes for auction, on the internet. In some cases, a list will also be published in local newspapers. After you have gathered enough information, visit the houses in order to weed out any properties that won't work for you.
Work out your budget. What are you willing to pay for the foreclosed house along with the repairs? If you're planning to "flip" the house, ask your agent to calculate the property's "after repair value". If you're planning to rent it after buying the property, calculate the monthly rate and compare to prices in the local paper for the same type of property.
Once all the research has been done, and all the numbers have been crunched, place a bid on the property. After you have purchased the house, have it inspected and appraised. Then look for a title company to research the history of the house. When you're satisfied, you can start the repairs or live in it.