Find a real estate agent. Purchasing a foreclosed property is very different then purchasing a home from an individual. There are oftentimes extra steps that you have to take. These can include submitting electronic offers through specific websites. You must have knowledge and experience in this area as it can be very complicated.
Finding an agent or office that lists foreclosures on a regular basis can also be to your advantage. They will oftentimes know of upcoming listings days prior to them going on the market. They also generally have long-term relationships with the banks they frequently list foreclosures for, which can make transactions smoother and sometimes faster.
Understand pricing. So many times people think that because it’s a foreclosed property a bank will take almost anything for it. Banks are institutions, not people. This is strictly business for them. They don’t necessarily “have to sell,” as is the common misconception. Sometimes a bank can hold onto a property for months or even years. There are a lot of factors involved in deciding price and what their bottom line is. So don’t assume a bank is desperate to dump a property and will take anything you offer.
Don’t expect repairs to be made. Banks most oftentimes sell properties “as is.” That means you assume the responsibility for any issues that are wrong with the property. They generally won’t even offer a discount on the price for them. As mentioned above, there are a lot of factors involved in deciding the price they will list at, and they include repairs in those factors. Many times these properties won’t be able to be have a government loan on them, such as VA, FHA, or RD, because of repairs needed. So keep that in mind before shopping for one.
Find professionals ahead of time. Line up your electricians, plumbers, and other contractors. Find companies you trust and get to know them. Then when the time comes you are prepared and can get them in when you need them.
The bottom line is, if you’re going to shop for foreclosures, understand what’s involved and be prepared. They can be a good deal and you can buy a good investment, but you must be educated and prepared.