Over the past couple of years, it has been possible to find good real estate deals by focusing on foreclosures. Indeed, in some markets it’s more expensive to rent than it is to buy a home. However, the foreclosure situation may be about to get worse. So, if you have been thinking that you have largely missed the foreclosure boat, you might have some opportunities coming up.
Foreclosures in Limbo about to be Released
According to CNN Money, there are thousands of foreclosures in limbo right now. These foreclosures are mostly in states that require some sort of judicial review before the process is completed. Because of the robo-signing scandal, many lenders feared that their processes wouldn’t hold up under scrutiny. In order to avoid legal issues, many halted foreclosures in order to sort out the problems in the system.
Now, though, many lenders feel more confident about their processes, and foreclosures are about to ramp up again. “Foreclosure squatters,” who have been living in their homes for up to almost three years without paying their mortgages, could soon be evicted. According to the CNN Money article, that means that we could see quite a few more foreclosures in the housing market.
As more foreclosures hit the market, this could be a chance for you to buy a home relatively inexpensively — if you’re ready to buy.
Tips for Buying a Foreclosure
If you are interested in buying a foreclosure it’s important that you understand the process, and that you understand what you are getting. As always, it helps to be informed. Research the foreclosure market in the area you plan to buy. You can also check for a real estate agent who has experience with transactions involving foreclosures. The right person on your side can be a real asset. Other things to keep in mind as you buy a foreclosure include:
- Get your financing lined up first: You have to move fast on many foreclosures. For best results, visit a lender for pre-approval. Get, in writing, how much you are pre-approved for so that it is clear you are serious and able to buy. You can also have the cash together.
- Expect the home to be “as is”: Most foreclosed homes are sold “as is.” This means that you aren’t going to get many concessions from the bank that owns the home. You could be missing something as trivial as fixtures, or you may find the wiring has been pulled out. Some previous homeowners trash properties on their way out. You need to be prepared to make necessary repairs.
- Make sure you are comfortable with the location: Determine your requirements for location. Do you like the neighborhood? Is it close to the amenities you want? Visit the foreclosed home and size it up for yourself, and make sure that the most important points are covered.
Buying a foreclosure can represent an opportunity if you have the ability to fix problems with the home, and if it is what you want. And, if the analysts are right, there should be plenty more foreclosed properties on the market soon.
Photo credit: JefferyTurner