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Understanding and Targeting Foreclosures Main Photo

Understanding and Targeting Foreclosures


Posted: March 06, 2018 by Rebekah Holten

Foreclosed homes are a bit taboo. People see the word foreclosure and tend to shy away. This reaction is totally normal and expected when individuals don’t know much about foreclosures and how they work. Educating yourself is important, especially if you stumble upon a foreclosed home and you instantly feel like it’s the one.

Foreclosed home is different than any other resale. In a foreclosure, only one real estate agent is involved, there is not much room for negotiation, the home comes as is so it’s on the buyer to pay for any repairs and upgrades they desire. There will also be a preapproval letter the seller wants from the lender before accepting any offer.

The upside to a foreclosure is that most bank-owned homes are empty which also allows the move-in process to go a little quicker. The first step to take if you’re considering a foreclosure is to find a real estate broker that specializes in these resales and works directly with the bank that owns the foreclosed home. This allows for direct contact and alleviates the possibility of any miscommunication.

Although foreclosures are priced lower, it is still necessary to do your research and look at prices of comparable homes and still provide a competitive offer. The pricing the bank decides on depends on the pace of the sale. Sometimes homes are priced low and multiple offers over listing price are piling up. Other times, these houses are priced too high, so coming in lower isn’t a bad idea.

Another good idea is to meet with the lender before meeting with the real estate agent. This will show you are serious about pursuing a foreclosed property and agents will be more willing to work with you, perhaps even over less serious clients. Real estate agents that specialize in foreclosed homes maintain relationships with different banks and are usually in the know about upcoming foreclosures. Don’t be afraid to make phone calls to get an idea of what’s coming up.

 

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