Surfing the web is an American pastime; we’re young boogie boarders, long-boarders, and tour veterans, we range from casual internet users to online professionals. It’s become second nature for us to start any business transaction by first doing a google search and riding that wave of information as far as we can.
When is comes to researching foreclosure properties, there are a number of good sites to surf: foreclosure.com (free trial), freeforeclosuredatabase.com (free but tough to navigate), and freeforeclosuresearch.com, they’ll all allow you access to the properties you need research… but searches only take you so far.
The next step is a big one: getting pre-qualified. It won’t hurt your wallet to do this, but emotionally it represents your decision to move forward with the process, and look seriously at a purchase. Getting prequalified is the single most important part of the process because without it, you’re stuck. If you want to be taken seriously, you need to have the letter in your hand. Not only will this tell you how much you can afford, but it will also tell your agent and broker how much leverage you will have in an upcoming transaction. Depending on whom you’re competing with, and how much you can put down, you could be in a very strong or very weak position to win the property. You’re dealing with a bank, so you should expect them minimize their loss on this property in a somewhat rational and fiscally responsible manner.
Once you’ve got the letter, there are two very different ways you can go, depending on your goals. First, if you’re a first time home-buyer looking to make the property your primary residence, you’re probably going to want to go back to your search and identify the specific properties you want to go after. A lot of people find properties first, but it’s better to find out about your financial options and credit first so you can refine your search. Also, some states and local areas have a lot of activity and some don’t. Nevada, California, and Florida are the top 3 states in US in terms of percentage of properties for sales that are in foreclosure, while Vermont has the lowest. California and Florida have the highest volume of homes, so if you plan on living there you’ll have more options.
If you’re an investor, you’ll be less constrained by where you invest, though you may want to be within driving distance so you can check on the property from time to time. SmartZip.com already has homes in FL and CA listed (and is rolling out the rest of the US soon), and is partnered with Foreclosure.com, so taking a look there will be a good idea.
All foreclosures are not equal: some properties have been taken up to code by the banks in an effort to get them ready for sale, while others are real projects. The condition of the property can have a huge impact on the sale process and can inform you how many bidders might be, how many of those potential buyers are FHA and how many investors plan to put large percentages of cash down. It pays to know whom you are competing with when you make an offer.
Can you get a bad foreclosure? You sure can! People think that because the home is in foreclosure it’s somehow a great deal. That’s not always true; there’s the condition, the possible cash flow, the maintenance, property tax, and a slew of other things to consider. Already think you’ve taken too big a step into foreclosures? We’re going to talk next about the appraisal process and how that plays into the process.
In the mean time, take that big step towards the foreclosure market by getting pre-approved. You can still surf the net and look at properties, you’ll just have a much better idea of where the best beaches are.
Dan Perkins
To know more about
Investment Property Rating and
Real Estate Analytics check out SmartZip website.
http://www.smartzip.com
