How to Make Money from Foreclosure and Short Sales
The real estate industry is making a comeback and its the time is right to invest in foreclosed homes and properties. Investing in real estate is a wise decision as the returns can be substantial. However, real estate investments are not a means of making quick money, as they are not a liquid asset. The market conditions at present are volatile; with a number of foreclosure properties available at discounted prices. This trend will not last for long and soon the surplus properties available for grabs will be sold out. It is time to act now.
Things to Do Before Buying Foreclosed Property
The first thing to know is that there is no quick method involved. Investing in properties requires some amount of strategic planning. You just don't go and purchase a property. Here is what you need to do -
Determine a Market Area
You will need to identify an area where you want to purchase a foreclosed property. It is better if the area is easily accessible, one where you can drive to check out properties.
Do a Survey
Any area you pick will have more than one property on sale. Make the effort to locate every foreclosed property before you finalize the purchase.
Engage a Professional
Hiring a realtor will save you a lot of leg work. Be generous and offer them something extra in addition to regular commission. You do this and you can be assured of getting the best bargains in town.
Organize Your Finances
This is crucial because without money you are not going to get anywhere. If paying hard cash, you will be asked for proof of funds. If the purchase is being financed by a third party then you will need to have the paper work completed.
Line Of Credit
This is another option that you may choose to opt for. You get a "line of credit" from your bank. This will allow you to issue a check and give you enough time to find a mortgage company to finance you later.
More Tips to Help
The majority of foreclosed properties require remodeling; which adds to the cost of the purchase. You have to keep this in mind while buying the property. A contractor can work out on how much the remodeling will cost. On the other hand you can approach an estimator to check the property and give his suggestion. Most of the times they will provide a rough estimate based on square foot area. With a rough figure in hand you can bargain the price for modifications with the contractor.
Don't ever purchase a property directly from an owner. You might think you are getting a good bargain, while in actual you will be inviting trouble for yourself. There are known cases of sellers disappearing after the sale, without having paid the mortgage. In such case you will only have the deed copy to call your own as the mortgage company will take over the property to make even its loss.
Hire a professional attorney, realtor, surveyor or a Title Company to help you with the transaction. These professionals are qualified to ensure transactions are carried out smoothly and there are no frauds and you don't incur losses.
© 2013 Juana Aman