Foreclosure Listings

For both the novice and seasoned real estate investor alike, foreclosures offer an excellent opportunity to buy investment property at a discount. With the current market boasting the highest level of foreclosures in U.S. history, the time is definitely right to begin your search. However, before you dive into the foreclosure listing market, there are some things that real estate investors should know. InvestorLoft has assembled this bulletpointed list of things to understand, look for and be aware of as you explore this popular means for real estate investing.

• Not every foreclosure is a “good deal.” Review the following bulletpoints for what you should consider when reviewing a REO (bank-owned) property.
• Know the comps. Have your real estate agent run the comps in the area to determine what non-foreclosure homes have sold for so you have a firm understanding of current market value.
• Make sure your agent has experience in working with foreclosures. There is definitely an art to the process of researching properties, submitting bids and communicating with the banks. An experienced agent can make the difference between your offer being accepted or rejected on your property of choice.
• Pre-Approval is required. No matter what foreclosure listing you want to buy, banks require that you have a pre-approval letter from your lender or verification of funds on deposit for cash offers.
• Cash rules. If you’re in the financial position to make an all-cash offer on a foreclosure listing, banks like cash and cash offers are generally given preference over offers with financing attached.
• Research the listing agent. Foreclosure listings are most often handled by agents who have exclusive contracts with banks. They earn the right to list all the bank’s foreclosure inventory. Have your real estate agent research the past 3 to 6 months of the listing agent’s listings on the MLS and see what “sold” prices on their REO (bank-owned) properties were. If their listings traditionally sold for 5% over asking price, you’ll have a better idea of where your bid should come in.
• Understand the bidding process. Have your real estate agent find out what the bank’s purchase price on the property is versus their asking price. Examine the listing agent’s history of REO sold properties. Know the comps in the area. Be prepared to pay cash for preferential treatment by the bank. Make sure your agent understands the bidding process and tries to inquire as to how many bids have already been submitted.

You may find that the property of your dreams isn’t such a good deal once you dig into some of the above information, but the digging can save you from making a poor investment decision. Whether you’re looking to acquire a foreclosure listing for a potential rental property or your primary residence, going into the transaction with eyes wide open only puts you at an advantage to other bidders! 

InvestorLoft.com maintains a high inventory of REO foreclosure listings for our members to browse. Banks enjoy working with agents who list on InvestorLoft because of our wide reach, investment-savvy membership base and financial analysis tools. Log in to InvestorLoft.com today to begin reviewing properties. If you’re not already a member, join InvestorLoft.com for free and enjoy all of the investment property search and analysis tools available.

The information contained herein is for educational purposes only and not intended to replace the experience counsel of your real estate professional, attorney, tax professional or other advisor. Before initiating any transaction, InvestorLoft recommends you seek professional guidance and perform the necessary due diligence in order to make the best possible decisions for your specific situation.