Tips for Buying Foreclosured Homes
Published by Denver Foreclosures on 2010-03-11 17:44:27
How to bag a Foreclosure Bargain
Numbers of foreclosure sales in the USA are at near record highs throught the country, and
Denver Colorado is no expection. Colorado is home to many beautiful locations, and with falling property prices and economic conditions exerting pressures on household, and
mortgage defaults increasing it really is a buyers market out there - but how do you make sure you buy a bargain, not a time bomb?
#1: Forewarned is Forearmed!
Nothing beats good preparation for getting the results you want. Do your homework well before the auction. A Foreclosure Auction is a live environment, so you need to have done your due dilligence before you strart bidding. Once you've bid, you cannot retract your bid and it form a formal offer to buy at the price you've given - unconditionally. With this in mind, you'll want to do as much research as you can on the properties being offered.
#2: Check for liabilities, unpaid Taxes etc on the porperty.
Another critically important thing to do with foreclosure sales is to make enquiries to ensure you are aware of any liens, liabilities and unpaid property taxes attaching to the property. When you buy a foreclosed home at auction, you're buying with it any attached liabilities and taxes. If a home does have oustanding taxes etc, that doesn't mean you shouldn't buy it - you just need to take these into account when deciding your max bid.
#3: Be prepared to pay the deposit if you win.
For most Auctions, if you have the winning bid, you'll need to pay a deposit immediately. a standard amount is 10% in most cases. In some states you will need to pay the balance of the purchase price on the day of the auction; in other states, you'll have 30 days to pay the balance. Make sure you understand the constraints placed upon you and be clear on the rules that apply to the auction BEFORE you bid!
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#4: Inspect the property or properties
Know what you're buying. sounds simple, but many people don't take this step. Simply put you need to carry out s thorough inspection of any property you are looking at buying. Spend a little time now to make sure you're buying a bargain not a headache.
#5: Decide your max bid
Your strategy for monetizing the foreclosure will affect how much you should bid for it at the auction. are you planning on making cosmetic changes to the property, improve it and then resell it for a profit? buy and hold it until the market improves? Rent it out? if your planning on renovating the property, figure the estimated renovation costs into your bidding strategy.
#6: Be prepared to walk away
Auction can be exciting, tense and fast-paced events if you have multiple bidders. Ideally you should simply ignore the fact that other people are bidding and simply bid up to your max. price but no further. Don't get caught in a bidding war - everyone loses but the bank in this situation! Stay calm and rational, and stick to the plan - just because you CAN win the bidding doesn't mean you SHOULD!
Also remember that there are a lot of foreclosure opportunities out there at the moment - don't pigeon hole yourself by focusing on one location only. Foreclosures in Denver may be great value, but colorado has other great bargains to offer as well.
