Six Things to Avoid When Purchasing A Foreclosed Home In Fort Worth Texas
Buying a foreclosure in Fort Worth can be a great way to save money on your new home purchase, but you need to exercise a certain amount of caution. Although foreclosure discounts can significantly lower the cost of a home, you can also end up in over your head financially if you’re not careful.
Avoid making these six common mistakes when dealing with a property in foreclosure:
1. Not hiring a REALTOR®: The number one mistake people make when dealing with foreclosures is attempting to go it alone. Foreclosure transactions are much more complicated than the traditional home buying process. Just one look at the Texas Property Code and you’ll realize the foreclosure process is extremely complicated. One mistake can be very unforgiving and you can lose in multiple ways. You could even find yourself on the wrong end of a lawsuit if you’re not careful. Here’s a helpful link to our Texas foreclosure laws. You may need the help of a professional REALTOR® who specializes in foreclosed homes and your state’s foreclosure statutes.
2. Not checking on state and local laws: To avoid legal issues, it’s important to know the laws on buying foreclosures. The contract has to adhere to these laws or it could be invalid. Again, using a REALTOR® can help you avoid real estate contract pitfalls and help ensure the contract process complies with your state’s statutory requirements.
3. Not thinking long-term: Make sure the foreclosed home you buy will be a good investment ten years down the road. If you don’t think that far ahead, you could be investing in property that may decline in value. Once again, the use of a REALTOR® that has access to the local Multiple Listing Service which is valuable information relating to the real estate buying and selling cycles in your local real estate market.
4. Not saving for repairs: It is a good idea to have some savings for repairs. Don’t just look at the cost of the home when determining your budget. Repairs are commonly needed in foreclosed homes, especially ones that have been vacant for awhile. Many investors specializing in foreclosure properties estimate closer to 35 percent of the purchase price for rehabilitating a foreclosure property. Here’s a handy calculator to get an idea of what may be involved in purchasing foreclosure properties.
5. Not narrowing down your search: It’s easy to find foreclosed properties in any part of the country, but it’s best to focus on a specific area to avoid being overwhelmed. Work with a local REALTOR® to find a home that suits your needs. Your REALTOR® can use the Multiple Listing Service and personal relationships to help you narrow your search and discover properties and information which you may not be able to locate on your own.
6. Expecting significant foreclosure discounts: Don’t assume that the bank will take a big chunk off the price of a foreclosed home. The market in Fort Worth is strong and you may have competition. You’ll still need a negotiator for that. Hiring a professional REALTOR® can help with the negotiation process.
If your planning to purchase a foreclosure in the Dallas Fort Worth area contact me to discuss your options and talk with one of my lenders.