Last Updated on Monday, 27 June 2011 10:01
Written by Admin
Monday, June 27th, 2011
{What is the Advantage of Buying a Foreclosed House?
by Natasha C. Unger
It’s in all of today’sheadlines: foreclosed homes are at their highest levels in years. The number of properties in foreclosure is calculated to be about 3% of all the homes in the U.S alberta mortgage rates. today.
And you can get a great bargain, and make a great investment if you follow the correct steps.
For the best results, you should contact a real estate agent that specializes in foreclosed, or REO (real estate owned) properties. Most lenders who hold foreclosed homes hire realtors specializing in such properties to represent them. You may even be able to take a foreclosure tour with one of these specialized realtors.
Don’t go to foreclosure auctions; you will not be able to examine the property and will be buying a “pig in a poke”. Buying a foreclosure through a real estate agent is similar to any type of home purchase, in that you can inspect the home and estimate how much you may have to invest to bring it to your standards.
Some homes have minor damage, just from being abandoned, but some have major damage that former owners may have done. A good idea that some people employ is to shop with a contractor so that he can give you a repair estimate after he sees the home.
You should figure the value of the home in comparison to the rest of the homes in the areas, known as comparables. Comparables are the prices that similar homes in the same area have sold for in the recent past calgary mortgage brokers. Make sure you use the prices of homes that sold, since listing prices can be overly high. Put aside the damage to the property for the moment; right now you only want to know what the value is if it were in good condition. At this point, you can subtract your costs of repairs from that price.
Begin your bidding as low as is feasible. Remember, if you wanted to pay full price, you would have bought a non-foreclosed home. The specialty real estate agent should be ablt to give the price range of the seller. In today’s market, right now is likely the optimum buyer’s situation, a seller who has no interest in owning the house under any conditions, is losing money on it, and has even more houses to get rid of.
Based on the comparables and the calculated repair costs, set a maximum bid in your mind that you are willing to offer, and don’t be tempted to go higher. There are many more homes you can pick from.
The next step is to apply for a home loan and you need to make sure you have enough funds to make repairs as well as the sales price. If you have a large deposit available, consider lowering it to retain funds for the repairs.
One type of loan that works well for foreclosures is a 203K loan, which not only will cover the purchase price but will also cover the costs of repairs.
Just as you would if you were buying any home, get your financing lined up ahead of time, and get a pre-approval letter from your bank. This puts you at a great advantage in bargaining for the property.
Remember that there are lots of foreclosures today, so there is no need to overpay or to settle. Real bargains are available, and foreclosures continue to rise, which makes this one of the best times to get a real deal in real estate.|#TITLE#Are You Interested in Buying a Foreclosed Home?
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