There is a lot to be said about the value of buying a property "below market". You can save yourself anywhere from 5% to 40% on a purchase or more. Here are a few things to think about before you put your money down and write up an offer.
- Do you have time? - Reason being, it can take weeks, even months to get a foreclosure or short sale through the process to closing for a variety of reasons, but the biggest one being the entire industry is log jammed with properties, and few "reasonable" people handling them. In a recent conversation with a mortgage company REO specialist, they said that they are handling 2X to 4X the amount of files(properties) than the system and the staff are designed to handle.
- Are you handy? - I mean really handy? - Many foreclosure properties provide no warrantees and are in poor condition. If you are not skilled to bring it up to livable conditions to rent or occupy yourself, you may be in for another set of problems.
- Do you have some funds set aside for fix up? - If you don't, you may not be able to get a loan right away to fund your improvements. I would recommend at least 120% of the amount you need you have available in cash, BEFORE you close on your new "adventure".
- Do you have an agent who knows about the process? - You want an agent who is familiar with the sales process in non-retail settings like this. Even an agent that has done a couple of these transactions will save you an HUGE amount of pain, frustration, and time...
Stieg Strand
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