Dealing With Homeowners to Buy Foreclosures

Dealing With Homeowners to Buy Foreclosures

When considering a real estate investment, you have to do more than give your asking price and hope that they accept it. This is especially true when dealing with a homeowner to buy foreclosures or property that is in the process of being foreclosed. By doing a little investigating, you may be able to find out the reason behind the foreclosure and depending on the situation. You can then decide how you will handle your approach. Each individual has their own set of circumstances that got them where they are, and you have to handle each situation differently. * Divorce/separation - In the case where one of the owners has left the home, perhaps the mortgage is too much for the other party to handle. When communicating with the individual who remains in the home, you can apprise them of the outcome if nothing is done. Let them know it would be in their best interest to avoid a foreclosure. This must be done carefully since there are probably a million other things going on in their lives right now.
* Change in Employment - When someone loses their job or their business is failing, convincing them that selling to you is the best option for them can be difficult. This type of individual may be difficult to deal with because they are in denial. If you cannot reason with them, it might be better to put the deal on the back burner and monitor the situation.

* The Jones' - Sometimes individuals purchase property that they cannot afford. By some miracle, they were able to get the mortgage, but irresponsible spending habits and poor budgeting has gotten them into trouble. This type of individual is trying to live a lifestyle that the simply cannot maintain. In this case, you have to give them a reality check, but in a nice way. If they don't budge, you may have to walk away from this deal because they will be the ones moving the day before they are getting evicted. Dealing with homeowners to buy foreclosures before they lose their home is tricky. If you don't say the right words, the lines of communication will be cut and they just won't deal with you. Knowing the type of person you're dealing with can give you an edge on sealing the deal.

How to Buy Foreclosures

How to Buy Foreclosures

Purchasing foreclosure properties works just a little bit different from a traditional real estate deal. Once you learn how to buy foreclosures, you will find that's it's not difficult, but that it does take a little more work on your part.
There are basically three ways to buy foreclosure property: 1. Default/Preforeclosure state. 2. Auction/sale state. 3. REO or bank owned state.

With default or pre-foreclosures, you typically deal with the homeowner--sometimes with the lender. You goal is to convince the homeowner that this deal is in their best interest. Finding pre-foreclosure properties can be done by subscribing to a foreclosure listing service where you will receive updates on homes in pre-foreclosure, banks and/or real estate attorneys can also provide this information. If you can work a deal, you will probably walk away with a smile on your face.

Buying at an auction can be rewarding, but it can also be frustrating. There is usually stiff competition, and you have to be able to make a split section decision to bid higher or let a deal go. Buying at auctions can get you great homes at a significant discount, but many times, you don't really know what you're getting into because you do not have access into the home for an inspection.

One of the easiest ways to buy foreclosed property is from the lender (REO). In many cases, the lender may be willing to wipe out liens and all property taxes. The lender may also make necessary repairs to the property or offer a discount to the buyer.

The steps for buying a foreclosure are simple: You are notified of the foreclosure, determine the value of the property, and more forward from there. Of course, there is more involved depending on the method of purchasing you take, but knowing how to buy foreclosures is half the battle.