Patience is a virtue if you are in the market for a foreclosed home. You can spend weeks or months in making a research so you can find the right homes that already belong to the bank foreclosures. You could find offers that are too good to be true. You have to know that these homes that are foreclosure would sell by 30 to 40 percent lesser compared to the current market value. However, experts said that you can buy foreclosed homes that are 5 percent below the market value. Here are 4 things you need to look at:
Checking the Location
In case you would use the foreclosed home for business or your investment, it would be wise to check the sales history of the real estate within the area. Would it be worth your money? You don’t have to buy foreclosed homes in an expensive and exclusive area as long as the location is economically stable. You should know how much would you get if you would decide to sell the property again. But you should also consider the insurance rate that you have to pay for the bank owned homes as well. Just like in the Southeast area, you have to purchase a coverage for the windstorm. Although there are property deals that are hard to say “no” to, homes that are foreclosure within the Hurricane Lane, it might be hard for you to pay for the high insurance rate.
The Condition of the Foreclosed Homes
Think about the situation why the home ended up as part of the foreclosure listings. The previous owners can no longer pay for their property because of the financial struggle. Therefore, don’t expect that the house was properly maintained. It might even be in poor condition by the time you inspect the foreclosed home. But this shouldn’t be the only factor that you have to consider when deciding whether you buy or not to buy the property. Check the location and try to estimate the amount that you have to spend for rehabilitating the home.
Think about Your Competitors
If you want to buy foreclosed homes, you should always remember that there are also professionals bidders who are eyeing on the property. Some people invest in bank owned homes and make a living out of it. They would just do a couple of restoration and sell it for a higher value. At the same time, you should also analyze the number of foreclosed homes within the area then check if the prices are too low compared to the market value.
Foreclosed Home’s Title
You should make a thorough inspection at the title of the foreclosure home. You should check if the lender or the bank is the only one selling the property or there are still other liens included in the title. Moreover, if you have the time, you might also want to see if the former owner of the property is involved in any kind of lawsuit which ties up the foreclosed home at the same time. These are just some of the factors that could affect the title and would bring such hassle if you were to buy foreclosed homes.