Chocopologie: the most Expensive Chocolate?
Newspaper and Internet ads represent another source for foreclosure listings. Others charge a small fee, but typically offer free trials so you can decide if the site is worth the cost before paying. This gives home buyers an advantage over the real estate investors and professional buyers who often make it difficult to purchase houses at auctions. Some sites, such as those provided by Fannie Mae and Freddie Mac, provide free listings. The U.S. Department of Housing and Urban Development, or HUD, serves as another great resource for those looking to buy foreclosed properties. All properties listed on the HUD Web site are offered first to buyers who are looking to purchase a home they will occupy themselves.
When such situations arise, it’s the new owner’s responsibility to evict the current residents. While the average foreclosure sells at more than 25 percent under the list price, keep in mind that this represents an average across the entire country. When deciding how much to offer for a bank-owned property, it’s important to take a look at the condition and features of the house. Now it’s time to make an offer and figure out how you’re going to pay for your new home. Consider what type of repairs, if any, you’ll need to perform to make it livable. So you’ve found the right property, and you’ve already started dreaming about what you’ll do with the place after you buy it.
Instead of holding on to a foreclosure and shelling out big bucks to maintain an empty house, many lenders place the property back on the market, often at a deep discount. In 2011, the average foreclosed property sold at 28 percent below its list price, and some savvy buyers saved 50 percent or more. Because the banks are usually eager to sell, foreclosures represent an excellent opportunity for buyers and investors looking to purchase homes at reduced prices.
If you can’t afford to pay cash for your property, or you want to avoid the challenges of an auction, look for foreclosures owned by banks or other lenders. Some banks will provide you with lists of homes for sale, while others may direct you to real estate agents who maintain the bank’s listings. One of the easiest ways to find REO properties in your area is to simply call local banks and ask about foreclosure listings. Known as real estate owned (REO) properties, these homes can be purchased using traditional mortgages and don’t require the buyer to participate in an auction bidding war.
Some angry homeowners even intentionally damage their home prior to an eviction. Protect yourself from big repair bills by taking a contractor with you when you look at foreclosed homes. To be safe, most sources recommend planning an additional 10 percent of the purchase price into your budget when investing in a foreclosure. Add to this the problems that could pop up as a house sits empty, particularly in extreme climates, and your great deal might end up costing you more than a standard property that has not gone through foreclosure. An experienced professional can help you spot potential problems and provide an estimate of how much they’ll cost to fix.
