The time is right to start investing in foreclosures, but if you’re new to real estate investing, you may not know where to start when it comes to buying bank foreclosure properties. The good news is that it’s really not that complicated. Once you know where to look, buying foreclosures is not much different than buying other types of real estate.
The easiest way to find foreclosure properties is to wait until the foreclosure process is over. Once the auction sale has been completed, many foreclosed homes end up going back to the bank because no one was willing to bid the amount that was owed on the mortgage. These homes become “real estate owned” or REO properties and the sale of these properties is handled by the bank’s REO department.
Most banks list their REO properties with a real estate agent, so buying bank foreclosure properties that have gone back to the bank can be as easy as searching the MLS listings online using a website such as Realtor.com. The listings may not state whether the home was foreclosed, but some of the lower-priced properties are likely to be bank foreclosure properties.
You can also see a list of bank foreclosures at the bank’s website. The drawback to this approach is that you will have to check the website of every bank that offers mortgage lending in your area. An easier method of locating foreclosure listings is to sign up at one of the many websites that specialize in foreclosure listings. Once you have located a bank-owned foreclosure that you want to buy, you can arrange to see the property and make an offer through the real estate agent just as you would with any other property.
If you don’t want to wait until the home goes back to the bank, you can try buying bank foreclosure properties at auction. To locate these properties, pick up a copy of your city or county newspaper and look at the legal notices. In most areas, lenders are required to publish a notice in the paper a certain number of days before the sale. When buying bank foreclosures at auction, you will need to have your financing in place ahead of time because you have a very short period of time to close on the sale.
The last method of buying bank foreclosure properties is to contact the owner prior to the foreclosure auction and attempt to work something out. Some sellers will be eager to talk to you, while others are convinced that they will somehow be able to save their homes and will not even want to consider selling to an investor. They key to success with this method is to talk to a lot of owners. Eventually you will find one who is ready to deal.
Now that you know how to locate and buy bank foreclosure properties, you need to be aware of a couple of potential drawbacks. The first is that foreclosed properties are often sold “as is.” This means you need to be extra careful when inspecting the property before the sale. The second is the price. Although many foreclosures are listed at bargain prices, that is not always the case. Make sure you do your homework before buying bank foreclosure properties to make sure you are really getting a good deal. Otherwise, you could find yourself losing money on the deal. However, there is a lot of money to be made buying and selling foreclosures if you buy the right properties at the right price,