Looking for property is exciting and a bit nerve-wracking. Sometimes it feels like a really expensive game of chess. Now and then, as you search for real estate, you’ll see bank-owned properties for sale. Often, this is a foreclosed home that a bank is trying to sell to recoup the losses incurred from the owner who couldn’t pay their mortgage. In many cases, finding and learning how to purchase foreclosed property like this comes with the opportunity to save money on a home or get your hands on undervalued real estate you can use as an investment.
Purchasing foreclosed property comes with its own set of challenges, too. Finding the best deals requires some leg work. To be successful in the foreclosure market, you must either do your homework on what you’re getting involved with or hire a professional who will make sure you don’t put yourself into an undesirable situation.
How to purchase foreclosed property: Flipping houses has become a widespread practice
HGTV provides a lot of excitement for people with time on their hands. Seeing others flip houses for substantial returns in a short time creates the thirst to get involved in the process. It seems so simple to buy a home, paint it and do some yard work, then sell it for a handsome profit. It’s not quite as easy as television makes it seem.
If you’re interested in flipping homes, one of the most important parts of turning a profit is to make sure you find the right property at the lowest price possible. This gives you a wider margin of error to turn a profit – or a much bigger profit if everything goes smoothly.
There is no shortage of strategies for how to purchase foreclosed property. Homes in foreclosure or pre-foreclosure are great opportunities to find a deal, because sellers are willing to sell low to relieve themselves of the burden their property has become.
Just because people are eager to sell a property doesn’t mean it will be easy to buy, though. Sellers sometimes feel they’re being ripped off by investors and become defensive in accepting a bid. These interactions can become contentious.
Some strategies you can use to find foreclosed property include:
- Work with a real estate agent– Agents are the most knowledgeable people concerning your local housing markets. Not only can they tell you what houses are in foreclosure, but they can also let you know what comparable homes are selling for in the area so you have an idea of what kind of profit you could make if you are trying to flip.
- Search bank websites – Banks are anxious to get their money back from foreclosed property, so they will put available homes everywhere that people can see them. Bank websites are one place to look, but the best deals might not even make it there. Keeping your eye on the pre-foreclosure market can be the best place to get bargains.
- Visit county offices– Foreclosure information is public and will be filed with county offices. Sometimes this information is listed online, but you can also go into the county offices to find foreclosed homes.
The important thing to know going in is your plan and your exit strategy. If you get involved with one of these properties without a proper plan in place, you could find yourself with real estate that you don’t want as much as you thought you did. At that point, it’s a burden you have taken off one owner’s hands and put upon yourself.
Did you learn how to purchase foreclosed property before attempting the process yourself, or have you tried to learn by doing it?