A great question that has probably been asked a million times or more. It probably has been answered a million different ways too. My answer is yes but with 3 caveats.
I fully realize the answer spectrum has many more than 3 but I thought I’d pop out the 3 I think are at the top of the list. Of course, these three may be at the bottom of the list in your market. Regardless, they are worth the three minutes it takes to read them
For people with financing in hand, this should be an excellent time to buy. The market in my area is such a market. People with the money to put on the table seem to be getting the price they want. This doesn’t guarantee they are buying at the bottom of the curve but it does guarantee they are buying at what is considered pretty close to the bottom. Again, that is here. It may be different for your here.
In order to make Caveat 1 successful, you should be an expert in the caveat I call, know your local market. You can’t buy close to the bottom if you don’t know if the inventory of unsold properties is decreasing or increasing. You really should have a handle on the percentage of homes on the local MLS that have either been foreclosed or are distressed in some other fashion.
Here is a general rule you may find helpful if you already don’t know it. The bigger the foreclosure percentage the bigger the foreclosure discount. By no means is this the only information you need but it is a very good starting point for your research.
Our local newspaper recently added a page on their online version that is devoted only to the foreclosures in the county. It is segregated by zip codes, addresses, and neighborhoods. That is one heck of a resource and it is free. If you have a friend who is still “selling” real estate, pick his/her brain to get even more detailed information.
I realize the savvy investor already knows this one but there are people who don’t. Hence, it rises to the status of a caveat. Always ask the foreclosure owner – bank, S&L, credit union, insurance company, pension fund, etc – if they will finance your purchase. Believe it or not and even in this day and age, some will answer in the affirmative. Don’t get scared off just because the owner is “a big institution” or a nationwide bank.
The idea is to make money in this business. Why not utilize all of the tools in the tool box, right? And, don’t forget, the above caveats are only a beginning. Customize your caveat list to your locale. Nobody (should) know(s) your market better than you.
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