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Foreclosures are dominating the housing market; avoid being blindsided when hunting down real estate deals.
Everywhere you look there is a deal to be had as foreclosure properties continue to flood the market. If you are one of the lucky ones shopping for a bank owned bargain, the following five tips should provide you with greater knowledge and foreclosure buying power.
1. Don’t get caught up in a bidding war
Everyone has their eye on these hot home deals, especially as the banks continue to put these repossessed homes back on the market at bargain prices. Since you’re not the only one looking for a foreclosure bargain, you’ll run into a bit of buyer competition.
Instead of getting lost in the feeding frenzy, work with us at 866-245-0946 to calculate what you can afford and stick to that price. This will ensure you don’t end up like one of the many who has over-extended their financial capacity in a bidding war.
2. Tour property with a contractor
Oftentimes bank owned properties (or REOs) are not in pristine condition. Banks are looking for a quick sale so that they aren’t stuck with additional expenses such as property taxes, insurance, heat and electricity and so on. So more often than not you’ll find that REOs are sold as is.
A leaky roof or a foundation crack could be minor, or they could be a big deal breaker. When touring REOs, make sure to bring a knowledgeable contractor along who can assess the major and minor repair issues to ensure you’re not investing in a money pit.
3. Consider fixer-upper costs
In addition to touring the property with your contractor, you’ll want to make note of all the repairs your contractor brings to your attention. Replacing a sink, fixing the garage door, or tile in the kitchen are all fairly minor repairs, but these can add up. Calculate the cost to make these repairs and add it into the overall price of the property to discern if you’re looking at a bargain or a budget buster.
Remember, the bank has the upper hand when it comes to foreclosures. Don’t assume that you’ll be able to get them to cover the cost of the repairs of the home, because most likely they’ll pass you up and move on to the next bidder.
4. Work closely with your lender
Smart buyers keep in close touch with their mortgage specialist. Communication is key when establishing your mortgage package and bargaining with the banks. By keeping the lines of communication open with your our mortgage professionals, you can be sure your offer and transactions are timely and that you don’t miss out on any new deals.
5. Wait to make an offer
It may be difficult to wait when there are hot deals to be had, but sitting on the market for a while is in your best interest. By waiting to make an offer you allow others a chance to set the bidding tone. This allows you to get a feel for other bids before you jump in and make yours.
But don’t wait too long; time is running short if you’re one of the many who want to take advantage of the home buyer tax credits. To collect either the first time home buyer tax credit or the tax credit for those who are moving, buyers must have homes under contract by April 30. That means that both buyer and seller must have signed the purchase contract by that date. Talk to our mortgage specialist sto learn more about the credits and deadlines.
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