Untitled Document
Before You Buy a Foreclosure
Property, Do Your Homework!
Online tools allow you to evaluate
potential purchases from the comfort of your home
By Rick Sharga, Vice President of Marketing for RealtyTrac
There are two words that give pause to
the most motivated real estate buyer or investor, especially during the
busy holiday season: property research.
In the past, property research equated
to extensive legwork — often involving a trek down to the local
recorder’s office — and expense that was spent evaluating a property’s
market value and all the debt encumbering the property. But now a few
clicks of the mouse on RealtyTrac
will get you that same information for properties nationwide:
- Comparable
Sales: provides up to 15 recently sold properties in the
neighborhood so you can pinpoint the property’s true market value.
- Lien
& Loan History: provides a list of all liens and loans
(mortgages and trust deeds) against the property so you can calculate
the total debt encumbering the property.
These reports are available for
hundreds of thousands of properties found on RealtyTrac,
the nation’s most comprehensive and convenient online marketplace for
homebuyers, investors and real estate professionals, with more than
550,000 properties updated daily. You can also order
individual property reports for any property nationwide.
Thorough research has always been
crucial to determining a property’s investment potential. But the tools
and resources needed to do that research are much more accessible now
than ever before.
“When buying a property, the right
examination and due diligence on the part of buyers can significantly
improve their ability to make a strong investment,” explains James J.
Saccacio, chief executive officer at RealtyTrac, which also maintains
the nation’s largest database of pre-foreclosure, auction and
bank-owned properties.
RealtyTrac can help investors and
homebuyers tap into the previously hidden foreclosure market by
providing access to property data formerly available only to
professional real estate brokers and investors. Today, homebuyers can
use these services to identify and research potential home purchases,
as well as to find the tools and professional resources they need to
help them close the deal.
It makes sense to give any property
under consideration — foreclosure or otherwise —an in-depth
examination. First, check the Lien & Loan History for all debts
secured by the property. Subtract the total amount owed from the
estimated market value, based on the Comparable Sales, to determine the
potential bargain. After making contact with the owner or real estate
agent, arrange a walk-through of the property to evaluate its
condition. Factor estimated repair costs into your purchase offer.
Before you close the deal, hire a professional home inspector to
inspect the property and enlist a title company to run a final title
check.
If you purchase a property at a public
foreclosure auction, you won’t have a chance to inspect a property
before buying, which makes this type of purchase more risky. But if
you’ve researched the title and determined the amount owed is far less
than the market value, you’ll have some margin to cover unexpected
repair costs. Before you go to the auction, set a maximum bid based on
your research and stick to that bid at the auction.
Although you’ll be able to inspect the
property if it’s bank-owned, the bank typically knows little about the
property and will sell it in “as is” condition. This means the bank
will disclose all the needed repairs it knows about, but is not held
responsible after the sale for any repairs it did not know about.
Factor the known repairs into your purchase offer and have a
professional inspection conducted before closing the deal. You should
also have a title company run a final title check before closing,
although most banks will make sure the title is clear before selling.
No matter what type of property you’re
planning to buy, good property research will help you recognize which
properties represent smart investments and which do not. And that
research is now much more convenient thanks to the extensive property
research tools available online through RealtyTrac. Remember, a little
preparation before the sale can help you reap huge benefits. So, it’s
worth your time and energy to do a little homework!
|
