A foreclosed property or home can at times be an excelled real estate bargain. A property forecloses when their original owners fail to pay mortgages on time and thus have to return the property back so that the money can be retrieved. The following are a few steps to stay ahead while purchasing a foreclosed property.
Step 1
One first needs to search and identify a foreclosed property. They are usually put on auctions which one can easily find in the local newspapers, auction listings or even at the Sheriffs office. The foreclosure or auction section of the classifieds will most likely lead you to some of the best deals in the foreclosure business.
Step 2:
Another way to get first hand information on foreclosure home property listings, is to inform the local attorneys in the locality of interest and request to be informed about such auctions. Foreclosure home cases usually come to the attorney for resolutions and so they are probably one of the best persons to seek advice from. Real estate agents in your areas may have complete details about every property and may thus be helpful in pointing out foreclosed homes and properties. Real estate agents themselves are buyers of such properties because of the good profit it gives them when they re-sell it after making necessary repairs.
Step 3:
Urban development and Housing organizations can also be a nice place to seek for foreclosed properties.
Step 4:
On finding a foreclosed property of interest to you or one that you have decided to enter an auction to, the next step is to go ahead and make investigations on the property.
Step 5:
During the investigation process, one needs to check the property thoroughly. Firstly, one needs to get an estimate of the market value of the house. The acknowledgement of the market value will help you determine whether the bid you intend to make will turn the investment beneficial for you or not. While analyzing the market value, make sure to take the market trend into consideration as well. A property will be beneficial if the trend is up or tends to go up in the future.
Step 6:
On assuring yourself of the market value, rent the services of an expert and make an estimate of the total repair costs that needs to be incurred if you get the property. Add the estimated repair costs to the estimated market value to make a realistic decision of whether the deal is of value or loss to you.
Step 7:
If possible get details of owner ship and check for any arguments over the property. A disputed property is something no one will want to purchase.
Step 8:
After all the investigations have been made and you are satisfied with the prevailing condition of the property you should then contact the auction or foreclosed property trustees to get information about the minimum bid amount that may be accepted on the auction.
Step 9:
A decision phase comes up once again. Once you get to know the minimum bid, you now have to decide whether you can finance this property or not? Will taking a loan be a wise decision? How will you repay the loan?
Step 10:
Finally when the finance decisions have been made, the last thing left is to submit a proposal to the foreclosure committee according to the predefined criteria set. Every auction has its own bid submission guidelines. On reading through the guidelines completely one can draft the bid accordingly.
These are some guidelines that will assist you through the basic procedures of buying a home at a foreclosure auction. There however may be certain amount of legalities involved in the process. Therefore it is required that you read the auction guidelines carefully and if you are a novice or first timer, please use the services of an expert or a real estate agent so you never find yourself stuck in some kind of financial or legal issue.
Make sure you clear that there are no legal bindings on the foreclosure property. Some trustee or foreclosure companies give the owners certain amount of time. The property may be returned back to the owners if they make complete payments within that time period. It is very easy to be left with empty hands and disappointment in such cases and it is of grave importance that we show a great deal of caution.
