Last month, Brad Geison, President and CEO of Foreclosure.com announced that he believes the worst of the housing downturn is history. If he’s right, we may see the industry start to turn around and get a nice boost in new home sales before the year ends. He’s not the only one predicting a drastic change in the market; many experts are expecting a turn around in the next 12 months, Including Mike Walsh at ForeclosureFish.com, who claims to see a steady increase of mortgage inquires. Although Mike expects the number of foreclosures to continue to increase, he says that most homeowners can stop foreclosure if they seek help fast. More options to stop foreclosure are available, as services like ForeclosureFish fight predatory lending and work to fix all the bad mortgages from the past.
Traditionally, the week after the Super Bowl is when home buyers start to look at properties. If Brad and Mike are correct, Realtors could expect one of the biggest post Super Bowl buying sprees they’ve seen in several years. With property values as low as they’ve ever been and interest rates even lower, it may be the best time ever to buy a new home. Not to mention all the low priced foreclosure properties flooding the market.
Finding a property in foreclosure may be a good option, but there are many dangers to avoid when looking at foreclosure properties.
Make sure the title is transferring free and clear. In some cases, the title will no longer belong to the seller. This is an easy problem to avoid, just do a lien and title search. Land and Title, LLC will do a simple lien and title search and a property valuation for about $250, which can save a lot of time and money in the future.
Always do a home inspection and a full appraisal. It’s important to know the homes actual condition before buying. There are so many people who skip these steps because of the cost, but it is worth every penny to find out what a home is worth before you sign on the bottom line.
Check the comparable properties in the area. If you can’t find any, just look at your property valuation or appraisal. These documents will list several similar homes in the immediate neighborhood. You should go check out these homes and compare them to the one you are considering buying. You may find that your home is a great deal, or you might find something even better.
Find out exactly how long the property has been on the market. In most cases, there’s a good reason why a home doesn’t sell. If the home has been on the market for a long time, find out why.
Don’t get in over your head. Just because a home that was once worth $500K is now selling for $300K doesn’t mean its a good investment. Many people look at this situation and think they will automatically make $200 when they sell the property, but this is rarely the case. Foreclosure properties are generally in very poor condition and will take quite a bit of work to get them back to their original value. Make sure you know your local market and know the repairs and improvements that are needed to sell your home at a profit. Today, many foreclosure investors are facing foreclosure themselves because they failed to calculate the actual expenses of their investment.
Working with a local Realtor will probably be the quickest and easiest way to find a foreclosure property, but if you are adventurous and want to try it on your own, there are many companies who can help you search foreclosure and pre-foreclosure listings nationwide. Pre-foreclosure listings are homes that are in the beginning stages of foreclosure or the notice of default stage. A foreclosure property is a property that has already been through the foreclosure process. Pre-foreclosure properties are generally sold by the owner and foreclosure properties are sold be real estate agents on behalf of the lender who foreclosed on the home.
Only time will tell if the real estate market is improving, but no matter when you buy a home, you’re sure to get many years of enjoyment, and if done correctly, it can be the best investment of your life!