The US housing market is being dominated by foreclosures and many home buyers/investors are scouting for bargain prices and deals.Â There are approximately 1.5 millionÂ foreclosed homes available acrossÂ the nationÂ and even more expected to become available during 2010.Â WithÂ theÂ number of foreclosures on the rise, a door ofÂ bargainsÂ opens for deal hunters.Â
The question many home buyers are asking themselves now is, "Do I make a sharp witted judgment now and how do I know if I am getting the most value for my money?"
Here are just a few tips when buying a foreclosed home that every home buyer should follow:
- Postpone making an immediate offer; contact the listing agent for details on the property after a few days and get tips and advice on the home - Don't be afraid to ask multiple questions such as "What do you think I should offer? How many offers am I competing with?"
- Speak directly with the lender that currently owns the property, establishing a relationship to them can give you an advantage with "insider information." Get a prequalification from the lender that has the home, this could possibly give your offer a higher chance of being accepted if you have a relationship directly with this lender. You are under no obligation to use this lender at closing so be certain to do your homework and get terms from other lenders as well.
- Bring your contractorÂ that youÂ will hire for improvements along with you to the questionable property.Â Foreclosures areÂ sold "as is" 75% of the time and oftenÂ these homes are in complete disarrayÂ due in part that the homeowner(s)Â were struggling to pay their mortgage and keep up with the maintenance of the property. Or in many situations they will purposely trash the property due to resentment of losing their home that they invested in.
- Don't get caught up in the foreclosure frenzy, there are many bargains on the market today that are not in foreclosure. Have your real estate agent that is representing you as a buyer search for deals (for example the longer the home has been on the market the moreÂ likely a seller may beÂ willing to entertain aÂ large price reduction). No offer is ever too low, and the number one reason buyers don't get the price they are wanting on a home is simply because they don't ask. These deals are available and far more inviting to work than a foreclosure (for example there is less chance of a bidding war and you can often close quicker).