Now may be the ideal time to buy a foreclosure. With banks and mortgage brokers still holding tight standards that make it tougher to get a mortgage, many buyers need to find a good deal to become home owners. Yet the economy is steadily recovering, giving buyers more financial flexibility and spending power than in years past. The two together mean a mass of cheap bank owned properties on the market, and buyers with the cash and spending power to get the mortgage necessary even from steely lenders.
AOL's Real Estate blog explains the statistics from the past quarter, when "consumers snatched up 193,059 properties that were in some stage of the foreclosure process or considered bank-owned, up 21 percent from the number seen in the previous three-month period, according to new data from the real estate data firm RealtyTrac. However, despite that increase, the level of foreclosure purchases remained 3 percent below that seen in the same quarter last year."
That is to say, home buyers aren't going for foreclosures as often as they were in tougher economic times, but they remain a great choice for the time being. Sure, home buyers have more capital now and can afford non-foreclosed homes, but the right foreclosure can be in great condition in a great neighborhood and still wildly more affordable.
So what do you need to do to take advantage of this unique moment in real estate history? First, get in touch with a real estate agent with long term experience in your area, or who specializes in foreclosures. Either will have relationships with banks and lenders and have the scoop on the latest properties. This will give you a major advantage over simply combing through foreclosure listings on your own. Foreclosures and short sales can go fast, especially if the properties are in good condition in a desirable neighborhood. Have a strong sense of what features you want in a home helps, so that you can make quick and confident decisions. You also absolutely need pre-approval, as the process of purchasing a foreclosed property is different than for regular non-foreclosed homes, and can be more involved. Because foreclosures are "As Is" pre-approval will also help you know exactly what your budget is and how much you can spend on any necessary renovations or upgrades.