FIRST TIME BUYER’S GUIDE TO FORECLOSURES

FIRST TIME BUYER’S GUIDE TO FORECLOSURES

Foreclosures are at an all-time high and the number of investors looking to capitalize on deeply discounted homes is rising as well. While buying a home that has gone into foreclosure could save you thousands, even tens of thousands of dollars, it is a purchase process fraught with dangers. If you are one of the many ‘first-timers’ thinking about playing your hand at the foreclosure game, there are a few things you should know.

Don’t go it alone: The foreclosure auction is a great place to hunt for bargains, but it is a hunting ground traditionally frequented by professionals. If you are not a professional it is strongly recommended that you hire one. Having an experienced real estate agent on your team will go a long way toward helping you avoid some costly mistakes. An experienced agent will be familiar with the laws regulating foreclosures as well as the auction process, and has access to valuable information pertaining to the properties you may be considering.

Know the process:Understanding the auction process will not only make you more comfortable it could help you avoid embarrassing if not costly mistakes. Even though your real estate advisor knows the ropes, it is a good idea to take a few observation runs at your local auction before becoming an active participant.

Research, research, research:Find out everything you can about prospective properties. Know the estimated market value and the amount owed. Be aware of any and all liens against the property. Check out the neighborhood and the property itself. The more information you have, the more informed your decision. Your real estate professional can help compile much of this information.

Give yourself several options to buy:If you go to the auction with just one prospect you are likely to walk away empty-handed. Work with your real estate professional to find several properties in your price range and of the type you are seeking. This provides you with greater opportunities for success.

Know your limit:Know how much you are willing to invest in each of the properties you are considering and stick to your limit. It is easy to get caught up in the excitement of bidding and if you are not careful you may bid your way out of the bargain basement and into debt.

Following these simple rules may be the difference between making a sound investment in real property and making a huge financial blunder. Buying real estate can be a complicated endeavor, buying foreclosure properties, even more so. Remember, information is power. Take the time to do it right and engage the services of a seasoned professional; you’ll be glad you did.