Currently, foreclosed properties are on the rise. A complicated foreclosure market can provide ample opportunity for educated investors, or leave room for devastating financial flops when a property is purchased without a thorough home inspection or sufficient knowledge.
“While some foreclosed homes can be a real steal, make sure to do your homework first,” says Mary Lynn Stone, President of Century 21 New Millennium.
When looking at foreclosed properties, investors should be aware of three different types of foreclosures, and the risks or benefits that come with each.
Real Estate Owned (REO). These homes have been foreclosed and are now owned by the bank. They have often stood vacant for some time and typically have maintenance problems due to neglect, so buyers should be extra cautious.
“REO properties are often sold ‘as is,’ leaving the buyer some wiggle room to request a price reduction based on needed maintenance. If you have the finances, time, and energy for a fixer-upper, REO properties can be a great investment,” Stone notes.
Short-sales. These are pre-foreclosed properties that are typically being sold at a lower price so that the seller doesn’t have to foreclose. Designed to create an ideal situation for all involved parties, short-sales can offer great deals for the seller, buyer and bank.
“If you are looking into a short-sale property, be sure you are pre-approved for a loan,” cautions Stone. “Also, make sure to have a solid home inspection done.”
Auctions. An auctioned home is one of the riskier types of foreclosed property purchases, as the buyer often has a limited window of time to view the property, and no opportunity for a proper home inspection.
“These ‘as-is’ properties can be a great deal for the seasoned real estate investor who knows what to look for. If you’re new to the field, purchasing a foreclosed home at an auction could be devastating financially when major unseen problems arise,” warns Stone.
In late 2011, Century 21 New Millennium joined OwnAmerica, a national web-based resource and training organization for real estate investors and investment specialists. Visit the C21NM Investor Center to learn the art of investing in real estate.
For more information on purchasing a foreclosed property, please contact Century 21 New Millennium at firstname.lastname@example.org, 800-382-1101 or Century 21 New Millennium.
CENTURY 21 New Millennium. Smarter. Bolder. Faster.
CENTURY 21 New Millennium, www.c21nm.com, is a full service real estate brokerage company specializing in residential and luxury properties. The Virginia locations are in Alexandria, Centreville, Culpeper, Fredericksburg, Gainesville, McLean, Stafford, and Woodbridge. The Maryland offices are located in Annapolis, Dunkirk, La Plata, Lexington Park and Lusby. Its core services include: mortgage financing, investing, settlement services, property management, property insurance, global relocation assistance, and commercial real estate.