What Buyers Need To Know About The Foreclosure Process
Posted by Lisa Udy on Wednesday, February 9th, 2011 at 5:44pm.With the record number of Logan Utah foreclosures on the market, you may be thinking that a foreclosure deal would be a great way to invest in real estate. However, with the good comes the not-so-good, and it is important to understand the foreclosure process before attempting to purchase a bank-owned property.
Here’s what you need to know:
- Be realistic. Don’t go into the process with pre-conceived notions of getting a piece of real estate for pennies on the dollar. Although it’s not unusual to purchase a bank-owned property for as much as 30 to 40 percent below market value, the truth is that the vast majority of distressed properties sell for about five percent below market value.
- Expect to put in time researching the market. If you spend a few weeks understanding the market and researching properties, it may very well be worth your time if you end up saving money on the house. Remember: purchasing a foreclosure often entails a good deal of research, patience and perseverance.
- Expect a distressed property to need updates and maintenance. Because most homeowners who end up in foreclosure have been struggling financially for a good period of time – some for more than a year – it is quite common for them to also neglect maintenance on the home. Therefore, expect to invest in general repairs and maintenance upon purchasing a bank-owned property.
- Don’t forget to consider the location of the distressed property when making an offer. This is because a bad home in a good neighborhood will likely recoup its value after you have invested the time and money to making repairs and updates. In other words, if the home is located in a good neighborhood with high resale values, you can overlook the condition of the property (within reason), knowing that you will likely come out ahead on the other side.
- Read up on foreclosure laws. Keep in mind that each state (and sometimes each town) will have its own foreclosure laws. It's best to work with a real estate agent who has experience handling foreclosures.
Indeed, the bargain real estate market may very well be your best investment in this down market, as long as you are a smart buyer who understands the foreclosure market.
Tina Fountain is the Broker/Owner of Tina Fountain Realtors an Atlanta real estate company. For more information on Tina and to view homes for sale in Atlanta visit tinafountain.com.
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It is so rare, where we live, to find a foreclosure that is a great deal. In most cases, foreclosures here are the same as private sales, however the banks make no warranties and representations and they don't provide an RPR or condo docs, if it's a condo. The pricing is generally the same, but people look at a foreclosure as a "sale." In most cases, it's just a regular price with a red sticker, so people think they're getting a deal.
Posted on Thursday, February 10th, 2011 at 1:05pm.