Buying foreclosed property can be tricky, especially if you have no experience with dealing with these kinds of properties. There are several ways to purchase distressed property: you can do so right at the public auction or you can wait until it’s gone back to the bank, where it will then be known as REO or real estate owned property.
When investing in real estate, foreclosed properties are one of your options if you wish to purchase property at a lower market value. What makes buying a foreclosed home different from a typical real estate transaction is that involves extensive negotiations with the bank.
What you need to know
- You can also opt to make an offer to a home while it is at the pre- foreclosure stage, wherein the homeowner is still the one who handles the sale of the home. If they’re selling the home for less than what they owe to the bank, then this is known as a short sale. Just make sure that the bank is in agreement with this!
- Once a property has been foreclosed on, they’re offered in auction in an effort to get them sold as soon as possible. Auction prices are typically low, but you may be bidding against companies so be prepared to set a ceiling price for yourself. Also, the sale is final when you buy property at an auction, there are no contingencies or anything like that; you’ll be getting it “as is.”
- Foreclosed properties may be in need of repairs, which means additional costs. Just make sure to do your due diligence – get an inspection completed before making any offers.
- Work with a real estate agent who can help you determine the potential deals that are available in Marquette that are best suited to your needs and budget.