Loads of foreclosed homes have been sweeping all across the United States due to the COVID-19 pandemic, severally bringing property value down, forcing families to move, and having government agencies handle the crisis as soon as possible. Surprisingly some buyers see this as an opportunity of a lifetime. Some buyers are buying homes for dirt-cheap prices.
Many real estate agents have been reporting that they have been getting calls from all over the country and as far as Canada from people trying to buy multiple houses, and others wanting to buy in bulk. One individual wanted to buy over 150 homes under 10K. That’s a happy story; there are other people who have lost their homes they’ve been working hard for all their lives, and to make it even worst other folks have lost multiple properties, cars, and even jobs.
1. Check Your Budget Carefully
Don’t let a small price tag lure you into buying a foreclosed house. Before buying ask yourself numerous questions: Do you have extra money for all the repairs the house is going to need? Who is going to repair it? Do you have extra cash in case you don’t find tenants? If you think ahead you have little risk.
Despite the economic fears and the struggling housing market, there are numerous stories where first-time homebuyers were lucky, smart, and bought the right property for a low-cost and are now paying $350 a month for 3 room, 2 baths house including insurance and taxes. She’s in her late 30s and has been a renter all her life.
2. Check Out the Property for Yourself
When considering purchasing foreclosed homes, it’s important to remember that a lot of properties may look good in pictures but not in person. Pictures will most likely not show the damaged areas of the house. You don’t want to end up with a house that will cost you more to fix than the profit you will make. It’s crucial to conduct a thorough inspection before making an offer to avoid any unpleasant surprises.
3. Look at the Surrounding Neighborhoods
You should always look at the surrounding neighborhood. One of the biggest mistakes people make is that they don’t look at the neighborhood they are planning to buy property in. Your home might be a recently built house in a crime-infested neighborhood. Also, you may not be able to recoup the cost of the repairs if the value of the house is depressed by widespread foreclosures in the area.
How to Find and Buy a Foreclosure Home – Video
4. How Long Has the Property Been Deserted?
In most cases the longer the house has been empty the more damage there is. There are a lot of problems that come with homes that have been empty for a long time. The water pipes get clogged; sewer gases back up, water damage, etc.
5. Look at the Landscape
When considering purchasing foreclosed homes, it’s important to keep in mind that neglected properties can come with their fair share of challenges. If the house has been neglected for many years, the grass, trees, plants, and branches will be overgrown and will most likely have bugs and insects that will crawl from the landscape into the house. This can lead to infestations, which can be both unpleasant and costly to remedy. It’s important to take a close look at the exterior of the property and address any issues before they become bigger problems.
6. Inspector, Hire one
This one is a no-brainer; an inspection should be the first thing on your list. Banks usually require a home inspection when lending money for a mortgage. But even if you’re paying out of your pocket find the most you can so you can fix it. It is crucial to be up-to-date with an inspection to avoid fines and other fees.
7. Avoid Quick Sale
Don’t expect a big profit for a quick sale. Investors who buy a property with the intention to do as little as possible to improve a property, hoping to resell for a profit when the market improves, may find little profit and a lot of headaches. Some cities are cracking down on property owners who neglect their properties. Charging high fees that increase over time, and don’t forget that neglected houses lose value at a high rate. Due to the Coronavirus pandemic, some people have resulted in applying for Mortgage relief to make ends meet.