If you’re in the foreclosure market, then you’re in the highest risk in real estate—there are no guarantees! Yes, you can make money from nightmares, but sometimes nightmares are just nightmares.
Foreclosure properties often have a lower purchase price, and you can get a great deal…a great deal of trouble. With opportunity, there’s risk. Little opportunity means little risk. Big opportunity equals bigger risk. Mitigate your risk. Here’s what you do if you want to invest in foreclosures:
Know your property. Make sure the value is there. Know the property and know the area. The best way to do the research is to get a good competent Realtor to assist you because in the end, nothing but the property value matters.
Once that’s taken care of properly, then you can worry about the next steps.
- TITLE CHECK
Get a title check from a competent title professional. Why? Because:
- Did you know that you might be purchasing a second mortgage? If this is the case, you’ll be required to pay the first mortgage.
- Are the taxes current?
- Is the association current? What might the association fees be?
- Were all junior liens properly named?
- Is IRS involved?
- How does a 120-day wait sound to you before you can work on the property?
These are some of the title issues that might affect your purchase of a foreclosure property, and that’s without even talking about survey-related issues that you’re not going to know prior to the sale.
- FORECLOSURE AUCTION REGISTRATION
If the title issues are taken care of or at least addressed, then the next step is to make sure you’re properly registered with the county in which you want to bid. Foreclosures are all cash transactions, no financing, and the money normally has to be with the clerk within hours after the sale. Most counties in Florida require five percent of your maximum bid prior to auctioning, that isn’t a quick process. Sometimes it can take days before you’re eligible to bid.
These are just a few things to think about when investing in foreclosures. It’s not for the novice investor; it’s for the seasoned veterans who have lots of experience. Don’t get caught looking in the distance at the beautiful scenery and get stuck in the quicksand.
Truly you’d be surprised at how much better off you are to just find a local Realtor and buy a standard property without all the excitement, bidding, stress, and extra risk of the foreclosure market. You’ll be able to take a deep breath, do the proper analysis, and find out what you really want and need.