The foreclosures are creating tremendous opportunities, but how do you buy right? Here are 6 tips for buying foreclosures.
- Use cash or get pre-approval from the lender you are buying from – Cash is king. Many banks will take a cash offer before they even consider a financed offer. If you are getting a loan, get pre-approved from the lender you are buying from.
- Don’t get caught up in bidding wars – Competition will bid up the price, do not get caught paying too much in a bidding war. Stick to your criteria.
- Evaluate lots of deals – Some fall in love with one deal and do whatever they can to make it work. It is highly recommended to fall in love with having tons of great deals to evaluate and purchasing the best ones. Make sure to always have great deals in your pipeline.
- Contact the lender directly – Creating relationships with asset managers can give you an inside track on short sales or if the bank takes the property back it can result is a deal without other bidders.
- Target fixers – Move in ready homes will have more competition, targeting fixers will allow you to buy at large discounts and add value through rehab. Make sure you have a contractor look at it, do your inspections and due diligence.
- Talk to the listing agent – Build relationships with REO listing agents who can feed you many deals.