How to Find a Good Deal in Foreclosed Properties

If you have serious plans to buy foreclosed properties, then by now you must be a bit overwhelmed from the thousands of listings in the market. Finding the one that would match your desires need not be like finding a needle in a haystack. You need not go through each and every listing and sieve through potentially good deals. There are ways to shorten the list and beat this numbers game.

While your search for good foreclosed properties starts with the price, its location and the overall condition of the property, there are other several things you need to constantly remind yourself. Before you sign the contract, and seal the purchase, it’s important to conduct due diligence.

Here are 5 ways to find a good deal in foreclosed properties:

• Find a trusted appraiser and have the property professional assessed

Usually homebuyers have a more optimistic expectation on the cost of renovation. Renovations are not only usually more costly, they usually take longer to complete than one thinks so. Have a professional assessment before you make a final decision on the property. 

• Check the utility bills

In trying to determine the real condition of the property, you need to know if the property has unpaid bills. One homebuyer from Ilolilo learned the hard way when he was slapped with a P800,000 electricity bill for the mixed–used lot he purchased through an auction. He had no choice but to settle it before even having any improvements done on the property.

• Check for empty lots and houses in the area

Neighborhoods which do not enjoy good foot traffic mean there will be reduced home values in the future. It is not enough that you check out if the property is run-down or not, it also important that you check out properties nearby if they are run-down or not. If the outlying areas have houses that are occupied by owners or renters, then you have a better chance that the property is likely to appreciate in the future.

No matter how much renovation was invested in your property, you cannot escape from the features of your location. If the neighborhood is sketchy and has a reputation for a high number of security incidents, then you need to weigh the risks of whether this is a property you would want to keep in the long term.  You may also have a hard time disposing it in the future.

• Let professionals help you make sound comparisons

Ask your contractor friends to give you estimates on the property. They are in the business for quite some time and would definitely give you good advice on whether your chosen property is worthy.

Also, you need to compare the current mortgage rates set by banks and other lending firms. If they are not willing to lend you money to purchase the property, then they may know something that you don’t. If they are willing to plunge in with you, then for sure the bank has done its due diligence and is aware of any pitfalls of the property. And lastly, it is always a good practice to compare 5 or more properties in the area so that you know more or less what the market value of your property is.

• A good deal is not always the cheapest one in the market

Go for the one that fits what you want for the long term. Price is a good measuring stick but you need to pay attention to what you really want. Especially when dealing with foreclosed properties, it is about being clear on what you really want that is most important. It is not always best to be going after “a steal of a lifetime.” Do your research and know why the property is dirt cheap.

Buying a property is one of the most important and riskiest decisions you will make in your lifetime. That is why you want to make a smart purchase. More so, be extra cautious when you are dealing with foreclosed properties.