| Whether you are looking to purchase a residence to | | | | It is very important to get pre-qualified for a loan |
| live in or making a real estate investment, it can be | | | | before buying a foreclosure. Properties sold at auction |
| quite profitable and risky as well, particularly for the | | | | are sold "as is" and it may be difficult to find a lender |
| novice foreclosure investor. Purchasing a foreclosure | | | | who will give you a mortgage for a property that |
| involves several steps and requires lots of upfront | | | | hasn't been inspected. |
| research and planning to make it profitable. Here are 10 | | | | 5. Do a Title Search to Discover Any Liens or |
| tips to help you succeed with foreclosure investment. | | | | Encumbrances Against The Property |
| 1. Become Familiar With the Foreclosure Process and | | | | Keep in mind when buying a foreclosure you are also |
| the Different Kinds of Foreclosures | | | | going to be responsible for any liens on the property, |
| Foreclosure laws and processes vary from state to | | | | such as property taxes owed or debts owed that |
| state and even county to county, so you will need to | | | | were secured by the property. It is imperative that a |
| become thoroughly familiar with the laws, financing | | | | thorough title search is done on the property to know |
| requirements, and foreclosure procedures before you | | | | these costs upfront. |
| think about buying a foreclosed property. | | | | 6. Research Home Values |
| There are three kinds of foreclosures you can | | | | Buying a foreclosure property is not always profitable. |
| consider purchasing. There are pre-foreclosures, | | | | You need to research home values in the |
| where you buy the property from the owner before | | | | neighborhood as well as comparable homes to make |
| the mortgage goes into foreclosure, there are auction | | | | sure you are not overpaying for a property. The whole |
| foreclosures where you bid on properties at an | | | | idea with investing in foreclosure properties is to obtain |
| auction, and there are bank owned foreclosures or | | | | real estate at bargain prices. You will need to factor in |
| real estate owned (REO) foreclosures which are | | | | the cost of having the property assessed. This usually |
| properties that didn't sell at auction and are now being | | | | runs between $300 to $500. |
| sold by a lender. | | | | 7. Have The Property Inspected |
| Each of these types of foreclosures has their own | | | | Be sure to have the property thoroughly inspected. |
| laws, processes and requirements as well as | | | | You may want to hire a general independent |
| opportunities for profits and risks. Buying a foreclosure | | | | contractor to give you an estimate on the cost of all |
| at an auction may often be the most profitable but can | | | | repairs before buying a foreclosure property. |
| also be the most risky. There is no opportunity to | | | | 8. Know The Total Cost Of The Property Before |
| inspect the interior of the property prior to auction and | | | | Making Your Offer |
| you must have cash available to pay at the auction. | | | | Remember to factor in additional costs besides the |
| REO properties are generally the safest, but you may | | | | mortgage, such as repairs and paying for any liens or |
| not find the deepest discounts. Negotiating with a | | | | encumbrances on the property. You need this total to |
| homeowner in the pre-foreclosure process can result | | | | help you determine whether or not a particular |
| in bargains but there are many risks and uncertainties | | | | property is worth making an offer on and to help you |
| with this kind of foreclosure as well. | | | | determine the amount you want to offer. |
| 2. Find a Property Using an Online Foreclosure Listing | | | | 9. Make Your Offer |
| Service | | | | Have your real estate agent help you prepare your |
| There are many ways to find foreclosure listings, such | | | | offer. Be sure to factor in the total costs discussed in |
| as through newspaper ads, searching through records | | | | tip 8 when coming up with your offer price. Also be |
| at the County Clerk's office, and through a real estate | | | | sure to not use all your cash for the down payment. |
| agent. Perhaps the fastest and most convenient way | | | | You will need cash for repairs as well. |
| to search through foreclosure listings is by subscribing | | | | 10. Be Patient and Be Prepared To Walk Away If The |
| to an online foreclosure listing service. These lists are | | | | Deal Is Not Right |
| kept up-to-date and will save you a lot of research | | | | Keep in mind when buying a foreclosure property that |
| time. | | | | the market is flooded with foreclosures. Not all of them |
| 3. Hire a Real Estate Agent | | | | will be bargains or a good investment for you. Be |
| A real estate agent experienced in the foreclosure | | | | prepared to walk away if your research or offer price |
| process can help guide you through buying a | | | | does not match up with what the property is selling for |
| foreclosure. He or she can help you locate properties | | | | and move on to researching a new property. To |
| as well as help you prepare your offer. | | | | succeed in buying a foreclosure property, do your |
| 4. Line Up Your Financing | | | | homework and persevere. |