If you have ever wanted to buy foreclosed homes in our town, a recent look at the market will have shown you that it is becoming more of a competitive exercise than was the case just a short while ago. Especially if you are an investor who is focused on the profit potential, not every offering will clearly fit the bill. Here are some ideas for sniffing out a profitable deal:
1. Look for a home that has been on the market for a while.
Low-priced homes which have been listed for a short duration often wind up fetching higher prices than higher-priced homes that have been idling on the market for a while. If you are looking to buy foreclosed homes in the area, ask your agent about bank-owned listings he or she feels may be overpriced. Then, if you like one that has been on the market for a while, consider making a low bid. Sean O’Toole, founder and CEO of ForeclosureRadar.com, says “The underpriced properties get a ton of activity and go quickly, but you can really get a better deal on an overpriced property.”
2. Stick with homes that don’t need repairs.
It’s different for those who are finding a property they will call home. For investors, foreclosure sales are only worthwhile if they will not have to spend more money and time repairing the house than the projected profit margin allows. A great deal is not necessarily the lowest-priced home in a neighborhood; seasoned investors looking to buy foreclosed homes have learned to undervalue neither the financial nor time investments.
3. Buy at the year- or quarter-end.
When you buy foreclosed homes from a lender, the situation differs from that with a traditional seller. Usually, you will be negotiating with a corporation. Since that is the case, their internal financial reporting can sometime make a difference. O’Toole advises to “…consider making a November or December offer highlighting the fact that you can close by the end of the year.” You just might be able to get a lower price simply by taking advantage of the bank’s timing.
If you would like to buy foreclosed homes in town and could use an experienced agent to help, I will be there every step of the way. Contact me anytime you would like to talk over how I can help you land a great deal!