6 Ways to Find the Best Foreclosure Deals
The keys to getting a good deal on a foreclosure are researching the market, keeping an eye on foreclosure listings and making a fast offer, preferably in cash. Bear in mind that foreclosure purchases are often risky; you may not have the chance to thoroughly inspect the property before making an offer.
Search for Government-owned Foreclosure Listings
Government foreclosures are known for providing bargain prices, but most homes are sold in an as-is state. This means all repairs or problems after the purchase are the responsibility of the owner. Check out the listings from the Department of Housing and Urban Development to get started.
Go to a Private Auction
Auction houses often travel around the country to auction off cheap foreclosures, and many offer financing options. Buyers may be able to check out the property beforehand, but they should set an upper payment limit for their desired property to avoid overbidding during the heat of the auction.
Go to a Sheriff's or Trustee's Auction
Although these local auctions normally sell as-is foreclosures and require buyers to pay in cash, they are known for offering a wide variety of foreclosures at tempting prices. To find the best deals, hire a title company to research the property before bidding. If there are delinquent homeowners association dues, tax liens or other debts, the buyer may inherit them.
Use a Foreclosure Listing Service
For a monthly fee, some companies provide comprehensive foreclosure listings that include both currently foreclosed homes and those approaching foreclosure. These databases often allow users to make offers online and directly contact the responsible agents. Companies such as RealtyTrac also provide value estimates based on comparable homes in the area.
Talk to a Real Estate Agent
Real estate agents can often find the best foreclosure deals, because they know the market and can work with banks, lenders and other real estate agents to source a larger number of listings. They can also find homes that are approaching foreclosure, often allowing their clients to make the first offer.
Look for Mispriced Listings
Although foreclosures that are mispriced below their value are likely to get a lot of attention and sell quickly, those that are set well above market value may receive no activity for months at a time. If someone does make an offer, the lender may be more flexible in order to get rid of the property more quickly.
Many buyers look to foreclosures to find great housing deals, but not every foreclosed home comes at a rock-bottom price, especially if it is in good condition and the lender is in no hurry to sell it. Most foreclosures are advertised at the market value of comparable homes in the neighborhood, allowing banks and other entities to make the highest possible profit on these properties. To find the best foreclosure deals, buyers need to look in all the right places and be ready to make an offer on the spot.