Buy Foreclosed Homes – Steps To Massive Profitability!

purchase of foreclosed homesSo, you want to buy foreclosed homes but you may not know where to start so that the transactions can be concluded in your favor. It cannot be overemphasized that the purchase of foreclosed homes is not one for the avid do-it-yourself person because of the complexities involved with the transaction from the legal to the financial aspects. If you have ever bought a newly built house from a real estate broker and found the process complicated, you can multiply such complexity at least 2 times in the case of buying foreclosed properties.

With that in mind, you will want to take the proper steps to ensure that whatever properties are purchased will be a good investment in the years to come. You do realize that buying real estate properties in this depressed market is an investment decision requiring careful thought, don’t you? If you do, then read on and find out about these steps to take.

Contact a Licensed Real Estate Broker

Your first step in the process to buy foreclosed homes is to contact a licensed real estate broker. You will be assisted by this professional almost from the start to the finish line of the transaction. At the start of the process, you will be shown a list of the foreclosed properties for sale that meets your criteria. You must provide said criteria such as location, area and price of the house in order to make the real estate dealer’s job so much easier and, thus, the process can go faster.

The real estate broker can also provide a list of contacts that will provide expert assistance in your choice. For example, you will need a general contractor to inspect the house for hidden defects and damages in the structure as well as a real estate lawyer to determine if the contract of sale is in your favor. Your limited knowledge of how to buy foreclosed homes will definitely be improved by your interactions with these professionals.

Secure a Pre-Qualification for a Loan

You will be paying for the purchase of the foreclosed home, of course. You have two avenues to do so – either pay in cash the full price plus other charges of the property or pay through a mortgage plan. Your plan of action will differ with these cases.

On one hand, if you decide to pay in cash for the full price, then you should have no problem about dealing with another process – mortgage contracts. On the other hand, if you intend to buy foreclosed homes through a mortgage payable over several years, you are well advised to secure a pre-qualification or pre-approval for a loan. The latter option has its own process to follow so you had better ask a bank loan officer for assistance in this regard.

A pre-approval for a mortgage loan will make the purchase of the foreclosed property proceed faster. In fact, you will be unable to even be considered for a home by foreclosure companies if and when you cannot show proof of pre-qualification for a mortgage by a bank. So, get on it as soon as you have contacted a real estate broker.

Inspect the Houses

Even when the real estate agent provides for glowing reports and wonderful pictures of the foreclosed properties, you must still do a personal inspection. This is especially true for prospective owners who buy foreclosed homes as their new residents because livability, safety and security are of great concerns when choosing a home. Even amongst individuals who purchase foreclosed homes for commercial purposes, thorough home inspection is very important.

These inspections are very important as defects and damages to the house’s structure as well as the quality of the neighborhood, so to speak, affect the market value of the property. Your profits will even be lesser because of the repairs that must be done before the house can be put up for re-sale. Beware that many previous owners and real estate brokers will collude to dupe a home buyer into believing that the house is in tiptop condition when it is not. So, be very careful when you intend to buy foreclosed homes.

Such careful consideration must extend until the signing of the deed of sale and/or of the mortgage contract. You must read the large and fine print of both contracts to ensure that everything is in order – the title is clean being foremost of your concerns. Indeed, you can never become too careful in your plans to buy foreclosed homes since your financial interests are at stake here.

Edwin Thompson is a successful real estate investor and entrepreneur. His passion is teaching people how to duplicate his success through articles like this. If you want more great FREE information like this on buying, selling, and making money with foreclosure properties check out the great Hubpage he found on!

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