There is no question - now is the time to buy a house. Foreclosures are at an all-time high and their presence in the many markets creates a feeding frenzy every time a new one comes up for sale. These homes are listed in every section of the market and are often in very good shape structurally; some only need light cosmetics (think paint and carpet). Like anything in life, it pays to be prepared. Here are some tips to make your experience as profitable as possible.
1. Be Prepared - Banks want to sell their foreclosures as fast as they can. In order to do this, they make their homes the cheapest on the street - and their strategy works. Most bank-owned properties sell in the first 30 days of being on the market. Make sure you are ready with a mortgage pre-approval or bank statement showing available funds when the house you like comes on the market.
2. Get Out Your Elbow Grease - It is totally possible to buy foreclosures that are in mint condition but they usually fetch higher prices than their "handyman special" neighbors. If you want the bargain basement top-notch deal on a property, be ready to get your hands dirty!
3. Know The House You Are Buying - The home inspection is NOT the place to save money. Get the best inspector you can afford and be present at the inspection. If the house has a septic tank, make sure you get that inspected, too. Banks usually will not fix anything so it is really important to know the condition of the home you are investing in.
4. For The Best Houses in Foreclosure, The Asking Price Is Often The Selling Price Or Close to It- Banks do not want to waste time negotiating and they often price their houses accordingly. It is increasingly common to see multiple full-price offers on the best foreclosures the first week they come on the market. Know your market and offer accordingly. If full price is $30,000 below the comps, you are still buying for $30,000 less than you would otherwise be able.
5. A Realtor Will Do You A World Of Good - Agents spend lots of time combing the market for good deals. Good ones know their marketplace intimately and have often worked closely with many of your future neighbors. Use their experience to help you find the best deal possible. They will have the objective, professional eye you need to spot resale potential before you purchase. This single choice will save you thousands down the road - and agents usually charge buyers nothing to work with them!
The markets right now are a perfect storm for sellers - but there has not been a market like this for buyers in several generations. Home prices and interest rates are really low right now making homeownership more affordable than it ever will be again. Now is the time to buy. If you wait until prices are rising again, you will have waited too long.
Alexander Krumm is a realtor living in sunny Sarasota, Florida and a partner in Sarasota Property Group. Be sure to visit the most useful and innovative Property Search Tool in the world, Brand New and Astounding!
