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NEGOTIATING WITH A DISTRESSED SELLER

 

Many savvy investors who do well in the real estate market don’t wait until a home forecloses to make their move. Often, they keep a watchful eye and look for homes in the stages of pre-foreclosure and try to negotiate a deal with the seller.

 

 

There are many reasons people lose their homes to foreclosure. A member of the family may have lost a job or become ill and the family’s finances haven’t been able to recover. Sometimes families buckle under the weight of the terms of their loans. Whatever the reason, more and more families are losing their homes to foreclosure throughout the country.

 

 

Once the family is unable to make their payments, their home will go into default and the foreclosure process begins. This information is public record and can be obtained from local public records offices, legal publications and fee-based services that track the information. The benefit of investigating purchasing a home in pre-foreclosure is that you have an opportunity to do your homework.

 

If you’re considering purchasing a home that’s in foreclosure, there are a few things you’ll need to consider:

 

 

• When contacting the seller or the attorney to determine if the seller wants to negotiate with you, be sensitive to their situation. Unfortunately some victims of foreclosure cause deliberate damage to homes in anger and you don’t want to stir up any ill-feelings.
• Make sure you’re aware of any other debts the homeowner may have that might affect the transaction including outstanding property taxes, liens, or judgments.
• Review comparables in the neighborhood to get a sense of what the home is worth. You should enlist an agent with short sale experience to help you.
• If the seller is willing, have them provide a list of repairs or enlist the help of a home inspector.
• Be prepared to make repairs. Foreclosures are often not in the best condition because the family has not been in a position to afford the upkeep.
• If you’re going to finance the home, be sure that you’re in a position to do so before starting the process.

 

The savvy buyer takes advantage of market conditions. By capitalizing on the rising foreclosure rate you stand the chance of getting an incredible deal and increasing the return on your investment. For more information on buying foreclosed properties, give us a call and let us help guide you through the process today!

 

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