Whether you’re a beginning investor or a home buyer looking to expand your options in a crowded market, distressed properties – like foreclosures – can be a great opportunity. But if you’re not prepared for the process, it can appear challenging. But that doesn’t mean you should avoid these types of opportunities. In fact, the more educated you become on distressed housing options, the better your chances are of finding the perfect property. Especially if you avoid the following pitfalls.
#1 – Trying to DIY
Unless you’re exceptionally well versed in the foreclosure buying process, it’s not something you want to attempt to do yourself. There are professionals out there whose sole job it is to make buying a foreclosure easier for clients. Step one is to find someone who specializes in these types of sales.
#2 – Not having your finances in order
Whether you’re going for a new home or distressed properties, the sellers want to know you’re serious. This means getting preapproved for a loan and having an accurate idea of how much you can realistically spend. Don’t forget to account for upgrades and repairs in your budget!
#3 – Thinking all foreclosure options are a great buy
Many buyers and investors think a foreclosure property is the best buy because it’s listed below market value. Just like any property, you’ll want to seriously consider the condition of the home, location, expected repairs/improvements, etc. Just because it may be the cheapest option, doesn’t always make it the best.
The budget for buying a foreclosure should be set at the value of the home. If you find your budget climbing due to increased repairs and problems found during the inspection, it may be best to walk away.
Today buying a foreclosure isn’t nearly as daunting a task as it was once made out to be. Avoid mistake #1 and get an experienced pro on your side. Metrowest specializes in distressed sales and would love to walk you through the process. Contact us today!