Investing in a property doesn’t always mean that you have to buy it from the developer. If you’re looking for something that is more affordable, buying foreclosed properties can be a better option for you. Not only that foreclosed properties can be cheaper, but they can also save you from the extra hassle that comes with the tedious process of buying real estate properties.
What are foreclosed properties?
To put it simply, foreclosed properties are real estate properties that have been “taken over” by lenders in the event that the owners are no longer able to pay for the mortgage. These could be houses, condominium units, apartment buildings, or commercial spaces. Lenders could be a bank, credit companies, or other financial institutions.
Here’s what you should keep in mind
Before setting out to explore foreclosed properties, there are a few things that you should look out for while searching:
- Additional Costs – In addition to the selling price, there may be other expenses that come with getting a foreclosed property. These could be associate dues in private properties, property taxes, taxes and fees for the transfer of the property title.
- Property Condition – Whatever the condition of the property is when you bought it, the seller will not improve it before transferring the property. Make sure to inspect the property well for any issues, especially for structural flaws. These could mean additional costs when you acquire the property.
Location – In buying any type of property, location should always be kept in mind. Consider if the area is safe and basic services are accessible. You may also consider the commercial developments within the area, such as malls, educational institutions, and even private hospitals.
Tips for Buying Foreclosed Properties
If you are now decided to buy a foreclosed property, here are a few tips that can help you with the process:
- Work with accredited brokers/agents – Directly engaging in a purchase may not be what some buyers prefer. Getting a trusted and credible broker or agent can give you fewer problems with the transaction. They can inspect the property for you, prepare all the documents needed, and ensure that you get the best deals.
RFShop by RFC is one of the reliable dealers that you can rely on when it comes to foreclosed properties. They sell other pre-owned items including vehicles and appliances that come with complete documents. If your cash on hand is a little tight, RFC offers two-year financing which you can use for the property that you are eyeing to buy.
- Have extra cash – Don’t just rely on loans to acquire property. Especially in real estate auctions, the chance of getting the property relies on who can make a down payment on the spot. Doing this may also mean you might get a bigger discount.
- Avoid High-Interest Rates – Stick to a fixed-rate plan to avoid increasing your monthly payments. This will also protect you from hikes caused by inflation or other market forces.
- Know the auction process – If you are transacting with banks or private lenders, make sure that you know the terms and the necessary documents.
- Be sure that you can pay – There are different financing options such as mortgages and contracts to sell from the bank. Getting prequalified for a loan would be preferred, but contracts to sell can be more flexible for buyers. Whichever it is, be sure to come prepared financially.