10 Tips for Investing in Distressed or Foreclosed Properties
1. Search on world wide web for distressed or foreclosed properties as a starting point. Use a professional REALTOR to identify great foreclosure deals for you. You may be successful at searching web on your own, but keep in mind some of information is outdated, some may be incorrect, and some of available properties are not even listed. A REALTOR subscribes to updated MLS listings and can offer you most current information available.
2. If you search yourself for distressed properties and purchase from selling agent, you are paying a commission to someone with a vested interest. Obtain objectivity in sale by working with your own REALTOR. You won’t pay any more. Technically, everyone works for seller, since they pay commission.
3. With distressed or foreclosed properties, time is of essence. Purchasers must close on date specified by agency, and cannot close after this without penalties of $25-200 per day.
4. It takes 1-3 weeks to qualify a loan. If you are approved for a loan, make sure you are qualified by your lender as soon as possible. If you are paying by cash, make certain funds are available. If finances are in order, REALTOR will then submit an offer. When offer is accepted by both seller and buyer, REALTOR will submit ratified contract to lender and closing agent. These steps will begin process of a successful real estate transaction.
5. When purchasing a distressed property, always obtain 3-4 bids from different contractors to estimate costs of repairs, if you do not plan on doing work yourself.