Posts (RSS)Buying Homes in Foreclosure Listings Is Not Easy After All
Homes in foreclosure listings are considered to be great buys because they are cheaper than new and existing houses. The growing supply of foreclosed properties has greatly contributed to the drastic decline in housing prices.
According to foreclosure tracking service RealtyTrac, about 3 million homes are expected to be added to foreclosure listings in 2009, an increase of three to four times the previous year.
Prices of homes in foreclosure listings range from twenty to eighty percent below the market value. With these prices, it is no wonder then that potential homebuyers flocked to foreclosure sales or foreclosure auctions.
However, homebuyers planning to purchase homes in foreclosure listings should take precautionary steps to avoid turning their investments into lemons.
Experts agree that the process of buying homes in foreclosure listings is riskier than purchasing properties the traditional way.
If you want to buy foreclosed properties, the easiest way to find them is through the Internet where foreclosure listings sites are posted featuring various foreclosed properties to choose from.
Find repo homes in areas with high rate of distressed properties, such as Arizona, California and Florida. These areas offer foreclosed properties at bargain prices.
However, do not just pick the least expensive property. You must take into consideration several factors such as the neighborhood where the property is located, the employment market and school district.
Buying a cheap property in an area with high unemployment and crime rate is not a good investment decision because home values in that neighborhood will take some time to recover.
Another best way to get a bargain deal is by buying from pre-foreclosure sales. This means that you purchase the property from the owners of distressed homes directly before it goes into foreclosure.
Homeowners during the pre-foreclosure stage are more than willing to sell their properties at any cost because they want to avoid the social stigma attached to the foreclosed property and the trouble of negotiating with lenders.
However, a little caution should be exercised on your part as some of the properties sold during pre-foreclosure stage may have hidden liens and back taxes.
You can also find best deals in foreclosure sales or auctions. However, another cautionary note, because properties sold at auctions are on as-is condition, you may find homes that needed major repairs and this may entail you to spend an undetermine amount of money to rehabilitate the property. It would be for your benefit if you have the home inspected first before signing the final deal.