Types of Bargains You Can Find When Buying a House
Finding a bargain is important in any type of purchase, but with a purchase as large
as a home, finding a bargain is even more important. There are bargains to be found
in distressed properties, repossessions, HUD, VA, REO and other types of real estate.
Many investors find that buying these types of properties is an excellent way to
invest in real estate and make a good profit.
One of the most popular types of real estate to invest in are distressed properties.
A distressed property may be a home in need of repair that is not readily sellable,
or it may be a home in good shape that must be sold quickly due to a job loss,
divorce, death in the family or financial difficulty. It is not unusual for these
special circumstances to force the fast sale of a home. These types of properties
can often be bought for far less than market value and provide a great investment
Repossessions can offer another good investment opportunity for the smart real estate
buyer. Quick runups in real estate prices like we have seen in recent years often
lead to busts as many home buyers are unable to make their monthly mortgage payments.
Houses that are repossessed by the banks can often be bought at less than market
value, especially when the banks are in a hurry to unload these properties.
The smart real estate investor will search for bargain properties being sold by HUD,
Freddie Mac, Fannie Mae, the VA, and Bank REOs (real estate owned). Many times, a
real estate agent will try to discourage the sale of repossessed homes in an effort
to sell their multi-list homes. Do not let yourself be discouraged from the
excellent investment opportunity that a repo home can provide.
A quick note about the many lists of repossessed homes you may see for sale. They
are a waste of time and money, and by the time you get your list, the houses may
already be sold. There are many places on the internet to find foreclosed properties
at no cost. There is no reason to purchase a list.
If you do decide to buy a repo, it is important to inspect the home thoroughly. Go
through the entire home and look for any problems.
HUD homes can also be a good source of investment properties. Find out when the new
HUD listings post. Bids on HUD properties typically must be submitted by a real
estate agent who has completed HUD registration. Make sure you work only with real
estate agents who are familiar with HUD rules and procedures.
The Veteran's Administration (VA) can be another good source of properties. Homes
owned by the VA are typically in better shape than HUD homes and repos, but they are
also offered through a bidding system. The VA will generally perform partial repairs
on the homes they offer, and they sometimes offer financing with low interest rates
and few costs. It is not necessary to be a veteran to qualify for a VA home.
Government agencies like Fannie Mae, Freddie Mac, and the IRS also offer repossessed
properties for sale on their respective web sites. These types of properties are
often cleaned and rehabilitated before being listed with real estate agents, and
these properties are generally offered at prices close to market value.
REOs (real estate owned) properties can be an excellent source of bargain properties.
Banks will often offer REO homes at excellent prices. REO opportunities do vary
widely depending on the condition of the property and the terms of the financing.
Any buyer interested in investigating REOs should check with lending institutions in
their area to determine what opportunities are available.
It is important to know what the home needs to make it livable and what its fair market
value would be. It helps if you are able to buy a home in need of some repairs and do
those repairs yourself. Doing your own repair work will greatly increase
your profit margin.
Of course, finding a
motivated seller is the key to making money in real estate.
There are many ways to find such sellers, and many opportunities to be had. Whether you look to
bank owned properties, repossessions, HUD homes, VA homes, or even homes listed in
the multi-list book, it is important to know where to find them. There
are various online services that offer huge foreclosure property
listings. You can get instant and free access to over 500,000
bargain homes and properties.
Start your free trial now!