| > | | | | obtain 3-4 bids from different contractors to estimate |
| 10 Tips for Investing in Distressed or Foreclosed | | | | costs of repairs, if you do not plan on doing the work |
| Properties | | | | yourself. |
| 1. Search on the world wide web for distressed or | | | | 6. If you are going to sell the property after |
| foreclosed properties as a starting point. Use a | | | | rehabilitating it, ask your REALTOR to research similar |
| professional REALTOR to identify great foreclosure | | | | properties in the neighborhood to ascertain market |
| deals for you. You may be successful at searching | | | | price. |
| the web on your own, but keep in mind some of the | | | | 7. Keep copious records for tax deductions. Any |
| information is outdated, some may be incorrect, and | | | | expenses related to the purchase, repair, or |
| some of the available properties are not even listed. A | | | | maintenance of the property may qualify. Meticulous |
| REALTOR subscribes to updated MLS listings and | | | | records are key to a profitable real estate venture. |
| can offer you the most current information available. | | | | 8. The title you receive after purchasing a distressed |
| 2. If you search yourself for distressed properties and | | | | or foreclosed property is a special warranty deed |
| purchase from the selling agent, you are paying a | | | | rather than a general warranty deed. Some buyers |
| commission to someone with a vested interest. Obtain | | | | are alarmed by this, but there is no need to worry. The |
| objectivity in the sale by working with your own | | | | purchase of title insurance protects the buyer. Each |
| REALTOR. You won’t pay any more. | | | | lender purchases insurance to protect the loan as well. |
| Technically, everyone works for the seller, since they | | | | Titling insurance should be obtained by the property |
| pay the commission. | | | | purchaser. It is always offered by the closing agent. |
| 3. With distressed or foreclosed properties, time is of | | | | Consider using an attorney instead of a titling company |
| the essence. Purchasers must close on the date | | | | as your closing agent. An attorney is only $50-75 more |
| specified by the agency, and cannot close after this | | | | than a titling company. A real estate attorney can |
| without penalties of $25-200 per day. | | | | remedy any situation that may arise. Therefore, they |
| 4. It takes 1-3 weeks to qualify a loan. If you are | | | | are more efficient representatives on time sensitive |
| approved for a loan, make sure you are qualified by | | | | foreclosure properties. |
| your lender as soon as possible. If you are paying by | | | | 9. Foreclosure properties require special addendums |
| cash, make certain funds are available. If finances are | | | | and special contracts by the individual bank and HUD |
| in order, the REALTOR will then submit an offer. | | | | office (where applicable). |
| When the offer is accepted by both seller and buyer, | | | | 10. Foreclosure properties are potentially the most |
| the REALTOR will submit the ratified contract to the | | | | profitable, but require the most attention to detail. A |
| lender and closing agent. These steps will begin the | | | | REALTOR experienced in foreclosure deals is highly |
| process of a successful real estate transaction. | | | | desirable because the paperwork must be in order to |
| 5. When purchasing a distressed property, always | | | | submit a proper bid, and timeliness is critical. |