Real Estate: Buying Foreclosed Houses

Purchasing foreclosed houses is one of the best options preferred by many bargain home buyers. It is not surprising! According to some reports, a number of foreclosures for sale can be bought at around 27 to 50 percent discounts. You can enjoy great discounts in almost all stages of the foreclosure process including "pre-foreclosures", home auctions, default notice, government "repo" homes and bank foreclosures.

When thinking about going for foreclosures in Canada, make sure to financially prepare yourself to invest in minor or major renovations and repairs. While a foreclosed property is priced under market value, houses that require substantial repairs can swiftly deplete home equity. As an investor, you should engage yourself in due diligence by means of reviewing sales reports, performing home inspections, obtaining property appraisals as well as repair cost estimates to find out the true value of purchasing foreclosed properties.

Finding Foreclosed Properties

So, how can you find discounted foreclosed properties? One good way is attending a public auction. Nearly all properties featured in an auction are sold as to what their current condition is. You should be ready to make full payment within 24 hours once your bid is accepted. Please be aware that once realty has been transferred, you will be responsible for eliminating tax and creditor liens as well as making needed repairs.

Searching for foreclosed short sale houses is another option. These properties are at times in the middle of the foreclosure process. Buying negotiations often occur with the loss mitigation department of the lender. As with short sales, lenders must agree to accept not more than the full value borrowed on the housing loan. Properties are generally sold through the bank or listed through realtors.

The process of a short sale can be a little complicated and lengthy that sometimes it could take up to five or more months to be completed. Purchasers should get "pre-qualified" financing before submitting an offer. Take note that some banks are not accepting offers that are lower than what is being asked unless inspections of the property reveal major problems.

Investors may find a good deal with short sale properties. However, this could not be favorable for investors who are participating in house flipping or planning to utilize the home for renting purposes. Purchasers who are into foreclosures can generally acquire homes at 10 to 20 percent below the appraised value.

One good way of getting the best price on foreclosed properties is to consult private investors who have wholesaling expertise. There are some investment groups and investors who are acquiring the whole bank portfolio that usually comprised of a number of foreclosed properties.

Quick Tips in Buying Foreclosures

When you finally decided to look for foreclosures, it is advisable to educate yourself about the different facets of acquiring properties under this legal process. Many investors who are new in this field are attracted by the low cost of foreclosures without even realizing all the costs associated with repairs or rehabbing a foreclosed property.

Foreclosures, bank owned real estate or short sales at times often require some repair level. As an investor, you should consider taking time estimating the true value of a foreclosure property before you purchase it.