In over 30 years of involvement in the real estate business, I have never seen the opportunities that exist today to buy foreclosed homes for sale. I remember just a few short years ago at the turn of the century (y2k), many real estate professionals thought we would never see the prices of the eighties and nineties again. It was thought that the time for buying cheap real estate had passed.
But that notion was incorrect. Opportunity has come full circle. We are seeing foreclosed homes for sale that are upscale high end properties selling for as much as half what they sold for 3 to 5 years ago. Thanks to the mortgage crisis, banks and the government are sitting on huge inventories of homes that have been repossessed. These homes represent a non-producing asset for these institutions.
It is better for them to liquidate these properties as quickly as possible and get their money working again. This is where opportunity meets the ready hand. You can profit by helping the bank and the government free up their money, and in return you get to enjoy a great home in a neighborhood, where your neighbors owe twice as much for their home than you paid.
You not only save on your purchase price, but you save a lot of interest because you paid less and a loan can be obtained today at a lower interest rate. If you reinvest this saving your wealth could grow several times faster. You can do minor repairs or creative financing and resell the properties in a short time and in some cases profit 200,000 or more.
Many of these foreclosed homes for sale can be bought for as little as $100.00 down. There are also some creative ways of obtaining these homes. This is especially true for investment groups. . To be successful in this type of endeavor, it is generally a good idea to seek the help of a competent professional.
About 95% of available homes are listed with a realtor. Also, a realtor can guide you through the bidding process and track the status of your offer. You can choose to go it along, although it generally costs a buyer nothing to use a real estate professional since the seller pays the agent commission in the majority of cases.
Things you need to know in order to structure a bona-fide offer are:
- What are properties in the area selling for?
- What type of financing is available for the property
- Are there special addendums
- A loan commitment letter or a letter from a banker verifying your cash.
- How long will you keep the offer open
- Will the offer allow you to make offers on other properties
- Will you be getting an inspection
- Will the seller turn on utilities for the inspection
- If you are paying cash will you be getting an appraisal or a broker price opinion.
- How will major repairs be handled
- How much earnest money is required
- Who will be holding the earnest money?
Also, many homes are offered through a realtor with thousands of dollars in buyer's incentives and rebates that can be obtained immediately upon closing on the property. This could mean as much as $2500 to $10,000 in your pocket immediately. Patience is the key to being successful. You may have to submit multiple offers on various homes, but if you stay the course you will be successful.