Purchasing a Foreclosure
There are several different ways to invest in real estate, but one often overlooked possibility is purchasing a foreclosure. There are always foreclosures available on the market and these homes and properties are almost always sold for less than what the market will bear, meaning you could stand to make a lot of money by purchasing now and selling later. But you first must find a foreclosure to purchase.
Locating foreclosure auctions is as easy as picking up a local newspaper. Bank auctions are often listed with the properties for sale as well as the time and date of the auction. The Internet is another wonderful source of foreclosure auction information. There are also subscription services available which will notify you when new foreclosures hit the market. It’s important to stay on top of these since they do not stay available for very long. Most are sold the first time on the auction block so don’t expect newly listed properties to be there after the auction date. Another great resource for foreclosure information is a trusted real estate agent – these people are in the field you’re dabbling in, why not get some of their advice? Who knows? They might just lead you to exactly what you’re looking for.
Once you’ve found the foreclosure you are interested in, find out as much as you can about the home’s history. It’s great to find a house that you want to purchase, but very disappointing to find out that the house has unseen water damage – especially after the purchase. The bank or even the auctioneer may have more information. Get as much data as you can to make a more informed decision.
On the day of the auction, you may bid and if the bank’s reserve has been met and you’re the highest bidder, the property is yours. Whether you plan to sell the home, rent it out or live in it yourself, you’ll probably still need to do some work to the home. Even if it’s just a new coat of interior paint, it’ll cost money. Larger expenses (new appliances, plumbing work, new roof, etc.) could break your budget and any unplanned, additional expenses could lower your profit if and when you sell the home, so it is imperative that you do your homework before the purchase.
Buying foreclosures can be profitable and fun, as long as you’ve planned for every eventuality. There is a lot to consider when dealing with foreclosures, so be organized and vigilant and the process will go a lot smoother.
Jim Miller is a full time full service licensed Realtor® in the Southern New Hampshire area with Bean Group and has many years of experience buying and selling New Hampshire Real Estate .
Contact Jim direct at 603-801-3987.Back to the Home Buying Tips page
Home Buying Tips