Getting Started with Foreclosed Homes for Sale
When you start looking at foreclosed homes for sale, the first thing you'll probably notice is that they're priced well below their full market value. Indeed, many are priced at 30% to 50% below their market value, with some selling for almost full market price and others selling at more than half off. What factors could possibly contribute to such a wide range of prices?
The Chance for Savings and Value
When foreclosed homes for sale are put on the market, they are appraised and priced "fairly", usually defined by the relevant state as a certain percentage of the home's assessed market value. The assessed value depends on the home's condition, neighborhood, nearby schools, and other factors, in addition to the general demand for housing. However, in the rush to sell foreclosed properties quickly, appraisals are sometimes made hastily and consequently the houses may be undervalued.
It is up to you, the buyer, to do your own research and determine whether homes are priced low because they are undesirable in some way, or because they were undervalued during appraisal. This is the key to making sure that you don't get stuck buying a dud.
Determining Value
Investigate the selling prices of similar homes in the same neighborhood to determine the home's approximate market value. Conduct a thorough inspection and estimate how much repairs and renovations will cost. Then add those repair and renovation costs to the home's asking price and see whether the home still seems to be selling below its market value. This process can seem difficult and intimidating at first, but with practice you will find it becomes easier to identify the true gems in the real estate market for foreclosures.
And remember, the closing costs for foreclosed homes are generally lower than those for traditional real estate transactions. Keep your eyes open for opportunities to reduce your closing costs. If you're buying a foreclosure from a government agency, the agency may even pay your closing costs for you, just to encourage you to buy the house more quickly.
Expert Assistance and Help
If you want to know more about how to buy foreclosed homes at the best price possible, turn to the experts at ForeclosureDeals.com. We provide round-the-clock customer service and extensive listings of more than 1.5 million foreclosed properties nationwide. Sign up today for your seven-day trial membership!
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Mortgage Rates
| National Overnight Averages | TODAY | +/- | Last Week |
|---|---|---|---|
| 3/1 Year ARM | 3.58% |  |
3.63% |
| 1 Year ARM | 3.47% | |
3.5% |
| 30 Year Fixed Mortgage | 5.15% | |
5.17% |
| 15 Year Fixed Mortgage | 4.62% | |
4.63% |
| 5/1 Year ARM | 3.61% | |
3.66% |
