A Guide to Buying Foreclosed Property
- Written by News Co Media
When buying foreclosed property, there are a few important things you need to know. For example, you need to do research into property prices, get the property checked out for building issues, use a sound strategy at the auction, and leave your emotions at home. Read on to find out more about buying foreclosed property.
Do Your Research
When you’re buying foreclosed property, it’s essential that you research the past house sales prices in the suburb the property is located in. This gives you an accurate barometer of value during an auction. An auction for foreclosed property can go either way –under or over market value. If you don’t have the facts at your fingertips, then you won’t know if the foreclosed property is a steal or has crept over its value on the market. This can happen when there is good investor turnout at the auction, usually in a booming marketplace.
Get it Checked
Purchasing foreclosed property is quite different than usual property purchases, as the terms are mostly set in stone. Also, there may be buyer’s rights missing from the contract, including a builder’s guarantee. The bank takes no responsibility for the state of the property, even down to no guarantees on termite activity. This means that you need to get checks done on the foreclosed property before you sign on any dotted line, and also make sure you have your lawyer present when you sign to look over all the fine print.
Use a Strategy
You should never walk in cold to a foreclosed property auction; you need to have a strategy. For example, what is your bidding limit? Have you done your homework so you know when an asking price is good value and when it’s over market price? If the bids don’t meet reserve, will you make an offer after the auction? This can be an effective strategy. Having a plan in place of how you will conduct yourself also helps you keep emotion out of the picture.
Leave Your Emotions at Home
When attending a foreclosed property auction, some people bring their emotions with them, feeling bad for the previous owner of the house and their ill fortune. But that is none of your business, and the foreclosed property will sell with or without your guilt. If anything, the property selling could be positive, as any amount that is over the debt owed will be given to the old owner of the property. In all instances, it’s best to stick to your game plan and leave the emotion out of it.
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