Thinking now may be a good time to start shopping for foreclosures? You may be right – but you also may want to be careful. While there are houses going for pennies on the dollar in some towns and cities (like the sub-$1,000 houses in Detroit seen on the news recently), you really need to know what you are doing to get into the foreclosure market safely. With over 1.5 million homes facing foreclosure, your time for picking one up might be now. Luckily, CNN/Money has an article up with some tips for buying foreclosed homes that I figured I would share with those of you looking to do so, along with my thoughts on each:
Don’t get caught up in a feeding frenzy – Kind of a no-brainer, but I suppose people get pretty excited about getting homes for so cheap. If something gets out of control, walk away and look for another home.
Contact lenders directly – This may help keep other bidders away from your home, by getting to it before it hits the market.
Get pre-approved from the lender you want to buy from – Not sure how this would work, unless you really are only looking at the listings from a single bank. Seems kinda…limiting.
Consider fix-ups – I would imagine if you are looking at foreclosures, you are going to have to do some work on the house. Be sure you can afford whatever needs to be done.
Hire a real estate attorney – Another no-brainer, unless you are practiced in the fine art of reading legalese.
Wait to make an offer – Although this goes against the “get it before it hits the market” concept, I suppose letting others make offers before you will let you see just where a home price is headed – and you can then walk to the next one if it gets too heated before you invest too much time.
Tour properties with contractors – Kind of like having your own home inspector with you, I would most definitely find SOMEONE who knew more than me about building to go with me.
So there’s their advice – what’s yours? Have you bought or looked at any foreclosed homes? If you have anything to add, would love to hear it and pass it along to other readers!