→ How Do You Buy a House in Foreclosure - Click here if you want to buy and Profit from Foreclosures! Search Foreclosures FREE For 7-Days! Free access for 7 days, try it out! No strings, no contracts, no hassles and you can cancel at any time. Hurry! Foreclosures sell fast. Visit RealtyTrac.com. With virtually every Bank, Government and Institutional property you'll find your next home waiting for you RealtyTrac, Inc., the leading online marketplace for foreclosure properties, provides all the resources that home seekers, investors and realtors need to locate, evaluate and buy properties at below market value. Founded in 1996, RealtyTrac sets a new standard for online real estate services by offering the largest database of pre-foreclosure and foreclosure properties, with more than 650,000 properties across the country, comprehensive property data, productivity tools and extensive professional resources. RealtyTrac hosts close to 2 million unique visitors monthly, and is the exclusive foreclosure data provider to AOL, Home Gain, MSN House and Home, The Wall Street Journal Real Estate Journal and Yahoo! Real Estate. Buying a Foreclosure Property Below Market Value: Five Tips from the Pros House hunting can be a very daunting experience, especially in today’s real estate market. Good real estate deals are increasingly difficult to find. But there are bargains out there, for people who know where to look. Web-based services such as RealtyTrac give consumers access to foreclosure and pre-foreclosure information that was previously available only to professional real estate brokers and investors. Today, homebuyers can use these services to assist them and to identify and research potential home purchases, as well as the tools and professional resources they need to help them close the deal. “Foreclosure properties can be a terrific investment, or give home buyers a much more affordable option than traditional properties,” notes Saccacio. “But they’re not a way to get rich quick, and a foreclosure purchase needs to be approached in an educated, intelligent manner.” Saccacio offers five tips to help you close a deal on a foreclosure property: 1. Learn about the different types of foreclosure properties, and the foreclosure process. There are three basic types of foreclosure properties, representing different stages in the foreclosure process: notice-of-default (NOD) and notice of trustee sale (NTS), which are both pre-foreclosure properties; and real-estate-owned (REO), a foreclosure property which has been re-purchased by the bank. For most consumers, buying a pre-foreclosure property from a private homeowner is the best option. It’s important that both the buyer and the seller see the situation as a win-win situation, in order to ensure a smooth process. In this case, the seller is able to get out from under a mortgage without destroying their credit rating, the lender is saved the time and expense of foreclosing on the property, and the buyer gets a below-market price on a home. These properties are formally in default, and sold to the highest bidder at an auction. Buyers are required to be physically present at the auction, and must pay 100% of the sale price in cash, on the spot. Though foreclosure auctions can offer significant savings, they are not for the feint of heart or the uninformed. Unless the buyer is already familiar with a particular property, there is usually little time to examine it. And the buyer will be competing against professional investors—and sometimes even the lender—at the auction. Once the lender officially reclaims a home, it becomes a real-estate-owned property (REO). While REO properties typically offer more time for evaluation and a more standard bank-managed transaction, their prices are usually very close to full retail market value. CHART: Stages of the foreclosure process Stage Positive Negative Pre-foreclosure: Notice-of-Default, Notice-of-Trustee Sale - Highest potential savings - Potential win/win scenario benefits all parties - Chance to evaluate property - Buyer / Seller negotiations can be difficult\ - Time pressure to complete transaction before auction Foreclosure: Auction sale - High potential savings - Immediate property ownership - 100% of the sale price required in cash - No time to evaluate property - Competing with professionals Foreclosure: Real Estate Owned (REO) - Affords significant time to evaluate property - Traditional bank financing - Lender often rehabs property - Lowest potential savings 2. Secure financing early It’s important for a buyer to be pre-qualified before engaging in discussions with a seller. It’s best to work with a lender who understands the foreclosure process, and can guide the buyer through certain steps, such as ensuring that a property is FHA-compliant. Another reason to consider pre-qualification is that not all lenders finance foreclosure properties. Having approved financing in-hand makes negotiations with both the seller and the lender easier, and may even make it possible for the buyer to simply cure the default and take over the existing loan to reduce loan processing fees. 3. Engage a real estate agent as a “buyer’s representative” Most people hire a real estate agent to sell their home and choosing the right real estate agent will make a buyer’s life much easier. There are agents who specialize in the foreclosure market, with specific experience in REO properties. Look for an agent with foreclosure transaction experience, as well as knowledge of local, regional and state laws. But it’s also important to consider the agent’s knowledge of the area; their ability to close a deal; and their access to other professionals (attorneys, lenders, mortgage and title professionals) to ensure that the buyer is in good hands. 4. Do your homework Stocks offer higher potential returns for investors than traditional savings programs, but are also riskier. Similarly, purchasing foreclosure properties is somewhat more risky than buying traditional real estate properties, but offer much higher potential savings. With the right examination and due diligence, buyers can significantly reduce the risks. It makes sense to give any property under consideration a thorough examination. Here are eight steps for doing a professional-level exam. CHART: Examination process steps · Identify desirable neighborhoods – Identify specific neighborhoods where you’d like to live or own a home. This will limit your search to a manageable size for you and your real estate agent, and give your a sense of relative property values. · Cast a wide net – There are a number of Web-based services that can put hundreds of thousands of foreclosure properties at your fingertips. Since the best savings are often found in pre-foreclosure properties, it’s important to check the percentage of pre-foreclosure (vs. REO) properties in any database before subscribing. · Determine the property value –Look at the original purchase price, and recent comparable property sales to determine the current value of the property. · Find out the amount in default and the remaining loan balance – In order to determine a reasonable offer price, you’ll need to know—at a minimum—how much money it will take just to satisfy the debt to the lender. · Run a legal investing report – Before purchasing any foreclosure property, make sure it is free and clear of any bankruptcies, tax liens or other financial liabilities. · Assess the condition of the property– If at all possible, visit the property, ask your realtor’s opinion, and review pest and structural reports to make sure that the property is in acceptable condition, or to determine how much of a rehab budget you’ll need to build in to your deal. · Build a positive relationship with the seller – Before purchasing the property, try to make sure that you’re entering into a win-win situation with the seller, so that they’ll do what they can to make the process easier and leave the property in good condition · Leverage your timing – Knowing when a property is going to be auctioned gives you an extra bargaining chip when negotiating with the seller or the lender. 5. Make a realistic offer Despite what you may see on late-night cable TV, investing in foreclosure properties isn’t a sure fire “get rich quick” formula. Lenders aren’t likely to give properties away, particularly in a real estate market where prices continue to rise. And homeowners in financial distress may be difficult to deal with, particularly early in the foreclosure process. The keys to a successful foreclosure property purchase are diligence and patience. As a rule of thumb, the best savings can be made at the pre-foreclosure stage, where home owners can avoid a foreclosure and lenders can save the time and cost involved in going through the process. Another critical point in the process is immediately prior to the auction date, when all parties might be most open to a last-minute solution. It’s not unusual to save from 10-30% of the market value on a foreclosure property, and certain properties offer savings of 50% or even more. An educated buyer—one who knows how much is owed on the property and what its market value is—can usually come up with a realistic offer; one that offers significant savings, while meeting the requirements of the lender. Now go out and familiarize yourself with the resources and tools available to take advantage of the opportunities offered by this formerly-hidden real estate market. With the experts pointing toward significant growth in available foreclosure properties, there’s never been a better time to line up your resources and get informed. Choosing the Right Real Estate Broker You should start searching for a broker as soon as you decide to buy a home. Talk to as many brokers as you can, and then choose someone you think you'll be comfortable working closely with. Many of your friends and relatives have probably bought and sold their homes through a broker. Ask them several questions about who they used and what their experiences were. You can find out which brokers specialize in the kind of home or the area that you need by choosing the type of broker that suits your needs. When you talk to prospective brokers, ask questions about the areas and types of homes in which you're interested. Do they seem knowledgeable? Most important, is their personal style a good fit with your own? The end result is -- You will find someone to help through the process of purchasing or selling your home and in any other financial need that you have. Use these same tips when you want to know how to choose a life insurance broker or if you want to know how to choose a stock broker. The same rules - and more - apply when you are looking for a commercial real estate broker. _________________________________________________________________________ → What Happens After Your Home is Sold at a Foreclosure Sale - Find out Here with a Free foreclosure consultation. Search through 1,000's of listings of old and new foreclosures. You can search for your dream home or you can buy home to sell and make tons of money. Free list of every Bank & Government Foreclosure in the Nation! Search Free for 7 days. Create YOUR Wealth Buying Foreclosure Properties! to access the official national database and see what investment opportunities are available to YOU! Make a Fortune From Real Estate Foreclosures You can make a lot of money when you buy homes that are in foreclosure at a discount and resell them at a huge profit. Search Free for 1 week. Government Tax Foreclosure Sales Search Government tax foreclosure prorerties - Free for 1 week. Real Estate Webinar Free Foreclosure Bank List Government Tax Foreclosures The Best Real Estate Investment City → Back to Top