What you MUST know about Foreclosures

This is a fantastic time to buy a home. Lender Owned Homes (foreclosed homes) are representing around 5% of the market on our local MLS but they represent close to 20% of the sells. This is because they are priced right. They are deals! Here are my MUST know facts about Lender Owned homes.

Do your homework first. Some of these homes will need a lot of work. Know what it will cost to buy a appliances, cabinets, toilets, lights, flooring. Why are you buying the home? If it is for a rental investment then keep your improvements low cost and simple. If it is for yourself, then feel free to spend more on quality. However, stay within what the neighborhood can bare. If you want to flip the home, be clear about your profit margin. If going into a partnership, create an LLC and be very clear as to each others roles and what you will do should one become ill or unable to perform.

Generally speaking, a Lender owned home is priced to sell. Be ready to make an offer close to or at the asking price. You will lose out with a low ball offer. Cash is good but make sure you can prove you have the cash in the bank by providing a letter or copies of bank statements or CD. If you are getting a loan, prove that you qualify and that the home will qualify.

How do you find a Lender Owned home? Check out what publications post the notices when homes go into foreclosure. In Tucson, it is the Tucson Territorial. Read the postings and research the homes that interest you by reviewing the county records. Find out when the auction is and attend it. OR, just contact the Lender and let them know you are interested. Or, find a REALTOR with the expertise in Lender Owned homes. Some advice here.....attend an auction for fun before spending your cash. Learn the system first before you risk your dough. Good luck!