Thousands of properties go into foreclosure each year, which means that you could potentially save even more money by opting to purchase a home that has been taken over by a bank or any other type of lender that is looking to recover money that is still owed on the property. As the number of foreclosures in your area increases, you may think that it is a good idea to make real estate part of your investment strategy. However, before taking this major leap, there are several things you should know about buying a property in foreclosure. You should definitely consult a reputable lawyer who specializes in real estate law in Santa Rosa to make sure that you learn everything there is to know about buying a foreclosed property.
Prepare Yourself Financially
When you plan to invest in real estate, you should bear in mind that these investments require a lot of time and effort. Hence, it is crucial to learn as much as possible about the in and out of buying foreclosures. Before investing your money, you should make sure that you are financially prepared. Financially, you should:
- Be free of debt.
- Have a full emergency fund to cover expenses for 3 to 6 months.
- Invest 15% into retirement accounts, such as IRAs and/or 401(k)s.
- Have money to fund your real estate deals.
How to Buy a Foreclosed Home
There are 3 ways to buy foreclosed properties, with each having its own distinct discipline. They are:
- Pre-Foreclosures: This process is one in which you make your purchase directly from a property owner before the bank declares a foreclosure.
- Auction: When you buy a foreclosed property in an auction, you place a bid, and compete with other buyers. The party that makes the highest bid ultimately makes the purchase.
- Real Estate Owned: REO which stands for Real Estate Owned is a rather common terminology used in describing a class of property that is owned by a bank, government loan insurer, government agency, or another type of lender. This process takes place after a property has not been sold at a foreclosure auction.
Consult the Best in Real Estate Lawyer in Santa Rosa
Are you planning to invest in a foreclosure? If so, make sure to consult the best real estate attorney in Santa Rosa for real estate law – Johnston Thomas Law. You can benefit from the experience and expertise of the top real estate attorneys in the area. Waste no time! Call the experts at 707-545-6542.