6 Tips For Shopping For Foreclosure Homes

Because of the huge volume of foreclosures now on the market and the record numbers that will be coming in over the next 12-18 months, banks are lowering their prices daily just to move inventory. Banks are also, in many cases, placing homes with listing Realtor agents that specialize in selling REO homes.

1. Get Title Insurance Before You Buy
Most everything we read in our quest for knowledge about foreclosures stresses that a title search must be made early in our investigations.

A search of the Title or legal description of the property is undertaken in most real estate transactions by the buyer's attorney or a title company. It is a way of assuring the advisor to the buyer that the party offering this property for sale has the legal right to do so, the correct legal address and description of the property (for property tax purposes), and that there is nothing preventing the buyer from owning exactly what he intends to purchase.

This public record gives the details of who has previously owned the property and when (aka the Chain of Titles). It includes a tax search, which reveals if any real estate taxes are owed and also any charges against the land itself. Any unpaid property taxes rank above all other liens registered. If you were to purchase a pre-foreclosure without knowledge of a tax lien, then you face the loss of your new investment unless you settle the debt. Title insurance could have protected you, but there's no going back.

Remember, a lender's title insurance does not protect the buyer. Your attorney will request that the seller removes any defects in the title so that you, the buyer, have no risk and can obtain title insurance. Why chance paying market value by mistake for a foreclosure? It is vital that you have the complete picture before calculating the maximum offer to be made to the seller of the property in pre-foreclosure, or commence to bid above the reserve at auction. In other words, if you are looking to invest in the foreclosure market, take the extra step and minimize your risk. Get title insurance.

2. Start with the Basics: Location
If you can do it in an area where schools are good, employment is good, crime is low, there's access to amenities and opportunities, there's lots to do, that's going to be a more desirable place to the population in general than a place with no amenities and where opportunities are limited.
Before purchasing bank foreclosures houses, also investigate their neighborhood area, especially if you are buying it for residential purposes. There should be necessary establishments within easy reach from the property including a bus stop, a grocery store, a school, hospital and other necessities of life.
Use a real estate website such as centricliving.com, which provides a map interface to display foreclosed homes. This will allow you to have a bird's eye view of the homes and condos that are available in the area that you're considering.

3. Be Prepared
Banks want to sell their foreclosures as fast as they can. In order to do this, they make their homes the cheapest on the street - and their strategy works. Most bank-owned properties sell in the first 30 days of being on the market. Make sure you are ready with a mortgage pre-approval or bank statement showing available funds when the house you like comes on the market.

4. Use the Web
Real estate websites like CentricLiving.com Yahoo! Real Estate and AOL Real Estate are making foreclosure listings available to people shopping for these types of bank-owned homes and condos. Do some searches and get a feel for what the going rate is in the area that you're considering. This early research will go a long way when you're deciding if buying a bank-owned property is for you.

These listings can be arranged by list or photo view. From the detailed descriptions, you can find out how much the owner wants, the number of bedrooms and bathrooms, and details like the square footage of the properties. I like the map feature, which lets me see the neighborhoods.

Starting off at one of these sites will give you some idea of what's available, along with price ranges. You should also compare the foreclosure prices to other nearby homes to see how much of a deal you might find.

Thanks to the ability to customize your searches by date listed, price range, city, and more, you can quickly figure out what appeals to you!

5. Inspect Carefully
Physical condition of the property: It is wise to hire a licensed and professional construction professional and ask him to determine the physical condition of the property. By assessing the extent of damage on the structural parts of the property, you will be able to calculate the amount needed to be spent on the repairs and renovations of the property so that you do not end up spending a huge sum on it.

Determining the price of a foreclosure is the most important part. You need to understand that these homes are sold absolutely as they are. You absolutely must try to find out everything you possibly can about the property. Once you buy it, you will be buying in to any defect, damage or structural flaw that it might have. In such a case your money will be lost to a bad investment.

6. Look for Fixer-Uppers
If you want a really good deal, look for houses that need repairs. These are often sold at really low rates and they will be profitable even after you spend money on repairing them.

About Centric Living LLC

Centric Living LLC (http://www.CentricLiving.com) provides a network of community-based real estate websites that utilize advance home search technology to provide extremely efficient access to the most comprehensive and up to date list of available residential real estate. Each community website is supported by highly trusted and experienced local real estate experts that are available to answer questions and provide service to prospective buyers and sellers. Centric Living community websites include: Ann Arbor, Birmingham, Brighton, Canton, Farmington / Farmington Hills, Northville, Novi, Plymouth, Rochester / Rochester Hills, Royal Oak, Troy, Walled Lake, & West Bloomfield.

Article Source: http://EzineArticles.com/?expert=Rich_Baum

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