The Housing Chronicles Blog: Tips on buying a foreclosed home

Sunday, May 3, 2009

Tips on buying a foreclosed home

It's easy to think that buying foreclosures is a sure path to riches, but from what I've heard, only those who specialize in the process of buying/fixing/flipping can earn money, and even then return can be dubious. But for others looking for a long-term hold, deals do abound, but before jumping in, carefully consider the following 5 tips from a Money magazine story:

1. Finding one has become easier

You don't need to show up at courthouse auctions or comb through legal filings. These days many banks sell foreclosed homes through real estate agents...

2. It's best to buy from a bank

If you buy a foreclosed home at an auction before the bank repossesses it, you'll have to pay in cash, and you usually cannot inspect the property. You may also later discover that there are liens against it...

3. Bring in a contractor before you buy

Many foreclosed homes have been abandoned, some even vandalized, and they often require major repairs...

4. Bid low

Banks aren't necessarily selling foreclosures at fire-sale prices; some are listed at market value, says Gene Hacker, a broker in Orange County, Calif. So be prepared to haggle. The bigger the inventory of foreclosed homes the bank has and the longer the property has sat, the greater your chances of nabbing a great deal, says Chris Matty of

5. Be prepared to wait

While some lenders are getting back to bidders within 36 hours, others are dealing with an enormous backlog that can hold up their response for as long as three months...

1 comment:

Clint Mello said...

Hi, Thanks I enjoyed your blog . You have a lot of good information that I can share and emplement into my realestate investment business. I also have a wholesale real estate website I will book mark your site.Thank you for the great info. Clint Mello