Buying a foreclosure can be a gamble, but if the risk pays off, you could score a great deal. However whether you are a first-time investor or a commercial real estate professional, no foreclosure is the same.
It’s important to know how foreclosures work, and know what you should do before investing in a particular property. Here are some tips to guide your decision-making process.
You may get exactly what you paid for
Foreclosed properties (including both homes and commercial real estate) are sold as is, meaning that unlike a typical house purchase, banks are not going to fix any of the problems that may arise before or after purchasing. Keep this step in mind when calculating potential upgrades or renovations needed to make your property complete.
Do your research
Whether it means hiring an inspector to check out the property or discovering if the property was previously vacant, researching can perhaps lessen the chances of buying an unsafe property. In addition, asking questions and understanding the process thoroughly can reduce your surprise to any hidden fees encountered in the future.
The process of buying a foreclosure can be extensive. The amount of paperwork and people that must approve your bid varies greatly, so patience is key. Accept there could be several speed bumps in your purchase and account for that time and how it could affect your business throughout the short-term and long-term growth.
Acknowledge there are no guarantees. At any point, your bid or offer could cancel without notice due to internal complications for any reason.
Although the process of being approved can be lengthy, the competition is fierce. According to Quicken Loans, foreclosed homes, for example, could sell anywhere between 18% to 59% less than a non-foreclosure in the same market depending on where you are looking to buy. With appealing prices, comes much interest. Therefore, think fast and act knowledgeable when deciding to place a bid on a foreclosure.
Investing in a foreclosure can lead to a great reward for those willing to put forth the substantial time and effort. Be cautious and be smart in order to place yourself in the best possible scenario to get the most bang for your buck.
At Century 21 Triangle Group, we have agents that can be by your side to ensure you have all the information you need to make the best decision for you or your business. Let us know how we can help.