For the non-seasoned USA Real Estate investor, what to watch for when purchasing a foreclosed home or distressed property can be a make or break your deal.
Distressed properties and foreclosed homes are definitely cheaper if you compare them with brand new dwellings or even resale properties. But if they are such a bargain, then why aren’t people hurrying to buy them? There are several important factors you may want to consider prior to purchasing such a foreclosed home or a distressed property. Save yourself the trouble of suffering from making a bad purchase and pay extra attention to these factors described below.
The first thing that you may want to do prior to purchasing a foreclosed home or distressed property is to check and see if you would be faced with the possibility of taking over the previous owner’s unpaid mortgages or undisclosed defects. This happens more often then you may think, as a number of USA real estate investors have reported having such troubles after purchasing a home. If the previous owner had unpaid mortgages or outstanding liens then the current owners may become responsible for paying them, especially if they make the mistake of not using a Realtor and having a title search completed prior to closing.
Make sure that the house you are buying does not require too many repairs. Because banks are not bound to any defect disclosure rule like the traditional home sellers are, they will most likely not inform you of the home’s defects leaving you to find out for yourself. And you may not even know that there is damage to the house until you have actually moved in. Imagine finding out one day that your investment property has a dripping roof or mold eaten walls.
But the above mentioned troubles are not the only thing you have to worry about when purchasing a foreclosed house or a distressed property. Retail buyers like move up buyers and first time homebuyers could be in fierce competition from the side or real estate investors. What usually happens is by the time the bank approves a loan for the mortgage application, the big real estate investors already position themselves to take the best priced and in best shape homes due to their big financing and their strong contacts in the market.
So if you are planning to buy distressed property or a foreclosed home then you better prepare for the troubles you may encounter and learn as much as you can on the subject. You could ask people that have already gone thorough this ordeal to help you and give you advice but your best bet is talking to a property agent or a real estate lawyer so you can find out the ins and outs of the foreclosure market.
The Equity Builders Group specializes in helping USA Real Estate investors navigate these types of situations daily and can help from finding the correct property, through inspections, title and finally to the closing table! Call us today to get started 941-718-7761!