Bargain Bin Shopping
1. Find listings – This is the easy part. You don’t need to show up at courthouse auctions or search through legal filings to find a home in Westminster or other Denver areas. All you need to do is look on sites that allow you to search for foreclosed properties, like http://bit.ly/qVL5Je. Just use the Listing Type search filter to narrow down to these sales. When you are ready to start looking inside, call me at 720-331-2444.
2. Work with a specialized agent – A real estate agent who specializes in foreclosures is not only a time saver, but a necessity. They will guide you through the process, help you find the best properties, tip you off to the various issues/challenges/risk, and do the nitty gritty along the way, from researching property title documents to recommending reputable inspectors and contractors. Westminster, CO may not be the easiest location to find a bank owned home but most of the neighborhoods are now holding their value.
3. Understand your buying options – While you can buy directly from the owner (before they’re officially foreclosed on), or try your hand among the seasoned investors at an auction, the safest way to buy a foreclosed property is to buy it back from the bank (bank foreclosed properties are also called real estate owned, or REOs). That’s because you can inspect the home before you buy it, and you can finance the purchase with a mortgage. Furthermore, when a bank takes back a home, it will clear any outstanding liens. A seasoned Realtor can guide you through the process and show you the neighborhood trends so you can feel confident about your offer.
4. Budget for repairs/renovations – Don’t underestimate the amount of work that may be needed to restore the home to a “livable” condition as these residences are sold “as is.” You can easily factor in 10 percent for updates and repairs on any foreclosed purchase. We also have lists of preferred vendors who have lots of experience with these homes and can give you a bid for a rental or an upgraded version for a homeowner.
5. Make an appropriate bid – Banks aren’t necessarily selling foreclosed homes in Westminster, CO at the kind of fire sale prices you’d find at a pre-foreclosed sale or at an auction, but that doesn’t mean you shouldn’t haggle – particularly if the bank has a huge inventory of foreclosed homes, and the property has sat vacant for some time. Just make sure you’ve done your homework, taking into consideration not only the price, but also the condition of the property, and the surrounding neighborhood. (Ideally, you want to find a foreclosure in a neighborhood that doesn’t have very many of them.) Also, get your financing pre-approved before you bid so you know what your top price and payment will be.
Some material provided by Vera Gibbons who is a financial journalist based in New York City.