Real Estate Investing

So you want to get a great deal on a home? Stick to the foreclosure listings. Sure, these can be found in abundance on the Internet, but many people are hiring realtors nowadays to help locate and negotiate great deals on already underpriced foreclosure properties.

Mercury News recently ran a feature on the success some are having in the Silicon Valley area. One homeowner, Zena Hall, bought a townhouse for $380,000, 29 percent lower than its value in 2005 and 5 percent lower than the amount of an appraisal that took place immediately prior to closing. The key for homeowners like Hall is focus, determination and vision.

“When I started my search for a house, foreclosed homes were the ones I wanted to see,” Hall told Mercury News. “I figured they would definitely be pretty affordable.”

Sometimes the art of closing on a foreclosure property is simply a waiting game. The lenders are literally covered up with these properties and very eager to unload them. The longer a property sits vacant, the greater the chance it will be vandalized, decrease in value or even bring down the neighborhood value. Mercury News cites one homeowner who waited to commit to a real estate-owned property until the lenders dropped the price a second time. The second price decrease was $30,000 and brought the home under $500,000 into the buyer’s range of affordability. It took two weeks, but proved to be worth the wait.

So enlist a realtor, stay focused, be patient, and fourthly, examine the property carefully and factor into your offer the costs of any home improvements you will need to make. Things like a new roof, cracked ceilings, or new carpet can be costly, but necessary living expenses. Many foreclosed properties belonged to homeowners without the financial means to maintain their homes properly. Sometimes, homeowners are even so distraught over losing their home that they will purposely damage the property before vacating. This is another instance where a realtor’s experienced, critical eye can come in handy.