It seems that everywhere you turn these days in Real Estate news, someone is talking about the increasing number of foreclosures. This is true in Washington state – and across the country. The thought of purchasing property for a double-digit percentage discount might have many investors (as well as home-buyers) salivating. But in reality, how easy is it to snag a “good deal” when it comes to foreclosures?
Despite the high number of foreclosures on the market, finding a good investment is easier said than done. Foreclosure investing is a tough business, and definitely not a “get rich quick” scheme for novices. Most foreclosure investors are dedicated to this segment of the market, and are in the position to snap up good investments even before these properties come up for auction – called pre-foreclosure. Foreclosure investing is also extremely risky. There is no such thing as a property inspection, and in most cases, lenders will not finance purchases. Buyers are purchasing the properties “as-is” – and in some cases, they are quite surprised with what they find once they take possession (a foreclosure investor once told me that upon entering a home purchased in foreclosure, the spotless exterior provided no hint of the completely gutted interior which had been used for years as a methamphetamine lab).
If you are interested in throwing your hat into the foreclosure investing ring, there are several services out there that can help streamline the process. You can register for monitoring services – such as RealtyTrac (www.realtytrac.com) – which will email you properties coming up for foreclosure, and provide minimal advice and assistance in teaching you how to make a purchase. Other services such local company Titan Foreclosures (www.titanforeclosures.com) will actually take a more proactive role in helping you invest in foreclosures. Of course, there are always traditional real estate agents who specialize in foreclosure properties as well.
One thing you must witness before taking up foreclosure investing is an actual foreclosure auction. Investors arrive at the courthouse steps with cash in hand (you must prove you have cash or cashiers checks ready to sign over at the auction to even bid on properties) to snap up bargain properties. Notices of upcoming foreclosure auctions can be looked up through one of the services mentioned above.
Despite all the talk of bargain prices and good deals, all foreclosure investors must remember that on the other end of the deal is oftentimes a family that is losing their home. This harsh reality is often too somber for many to capitalize upon. Still, there is a market for foreclosures out there – and the deals are plenty these days for those who can stomach the risk.