How to buy foreclosed houses without losing your shirt

By
Services for Real Estate Pros with Colorado Private MLS

I get dozens of requests every week from people wanting to buy foreclosed property. Many have seen magazine articles or late night cable shows about making millions in foreclosed properties, and have only a vague understanding of how the process works. Here then, are a few basic ideas about the smart, safe way to buy foreclosed property.

  • Don't buy a list of foreclosed properties! Many companies sell subrictions to lists like this, but it's public information. Look at www.hud.gov for a complete list of government foreclosed homes. Also, Realtors can often set up the MLS system to send you new foreclosed listings automatically. (It is wise to use that Realtor when you buy and sell - they can only do so much work for free).
  • Don't buy sight unseen on the courthouse steps. You are competing with experienced pros and may end up with a house needing tens of thousands in repair or having to pay off other loans.
  • Proceed slowly and carefully, and do a lot of research. Find out about other sales in the neighborhood. Just because a property has been foreclosed on does not mean it's a good deal.
  • Talk to a lender first. Be armed with a pre-approval from a strong, stable lender. Any bank you buy from is going to require it anyway.

Like all good investments, the higher the return potential, the higher the risk. There are great deals to be had in many markets, just like there are great ways to lose a ton of money. Let's be careful out there.

Comments (1)

Hanh Brown
Canton, MI

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Hanh Dang Brown
Feb 27, 2008 06:56 AM