How To Buy A Foreclosure
There are great opportunities to purchase foreclosures in today’s market. If you are thinking of taking that step, here are some things you should know.
An REO (foreclosure) occurs when the bank that holds the mortgage has taken the property back because of nonpayment. Some of the advantages to buying a bank-owned property are that the property has clear title, the property may be priced lower than comparable listings that are not bank-owned, and the bank may offer preferential financing terms. In some cases the bank may have already made some repairs to the property as well.
There are also some disadvantages to purchasing a foreclosure. The properties often do not last long on the market, which means you have to be prepared to make an offer almost immediately. Otherwise, that perfect home you saw on Friday may not be available on Monday when you decide to make an offer. Homes are usually sold in “as is” condition, which means the bank is not likely to make cosmetic repairs. Many banks charge a per day “late fee” if the closing is delayed, so it is important to have your inspections done and stay on top of the whole escrow process.
There are several common mistakes foreclosure buyers should take care to avoid. They are:
1. Don’t get caught up in a bidding war over an under-priced property. The excitement can cause you to pay too much.
2. Take advantage of the home inspection and get an accurate estimate of what the repairs will cost from an expert.
3. Know what other comparable foreclosures are selling for so you can keep your bid at market value or slightly lower.
4. Be wary of buying in a neighborhood that is flooded with foreclosures. That could mean further price drops and a loss in value if you have to sell within a few years.
5. Make sure you have your preapproval in place. This will not only tell you what credit you have available, but you as a buyer are more attractive to the bank than another bidder that has not secured financing.
If you are interested in purchasing a foreclosure, please explore this web site and use the search tool to find Lake Tahoe foreclosures (bank owned). You can search all active MLS listings for real estate in Lake Tahoe, California and Nevada. You can also sign up for Get California Listings Via Email, and Get Nevada Listings Via Email, so when a new listing is posted on the MLS in your favorite neighborhood, at the price range you selected, you’re immediately notified. This is a very powerful tool that will help you stay on top and ahead of the current market.
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