How to Purchase a Foreclosure
Many Atlanta natives are purchasing foreclosed homes to use as rental properties. While having a foreclosed rental property can provide positive cash flow and a valuable tax deduction, it can also be a headache if luck isn’t on your side. For those of you who are thinking about purchasing a foreclosed home, take a minute to read the four ways to buy a foreclosed home.
- Presale. A presale is when the buyer negotiates with the current owner before the home is foreclosed upon. The down side to agreeing upon a presale is the owner could come up with the money to pay the house off and you are out of luck after all of the time you energy you put into the agreement. To find out about presales in your area, follow the follow avenues:
- Ask your local county court how to search new notices of default.
- Find out if the County Recorder has data available online.
- Look in the “legal notices” section of the newspaper for properties that are coming up for sale at public auction.
2. Public Auction. When a home is sold at a public auction, the buyer can expect a discount of 10% to 25% of market value. Bidders will have to show proof of financing and must have a cash deposit on hand.
3.Real estate-owned (REO) sale. This transaction happened when you purchase the home directly from the bank. When you purchase an REO home, you are eligible to receive a mortgage and not have to pay cash. The down side to purchasing an REO, the price is normally near- market prices to recoup the costs of property taxes, maintenance, and legal fees. To find REOs, try the following:
- Check lenders’ websites.
- Call lenders and ask to speak to someone who handles their foreclosures.
- Check newspapers.
4.HUD homes. A HUD home is a home that the owners have defaulted on the federally issued loans. They become open to the public 10 days after they are foreclosed, however, it is harder to make a profit on a HUD home because they are sold at near-market value.
Don’t forget to have your potential new rental property properly inspected by a licensed inspector. Buying a home is a long term investment. Call Headmen Contracting today for all of your remodeling and repairs.