While the number of foreclosures has gone down in the past few years, there are still great deals to be found! However not every foreclosed home is worth the money! Make sure you know what to look for so you can find a deal buying foreclosures in IL.
Pay Cash or Get Pre-Qualified Before Making An Offer
When buying a foreclosure, the process can be highly competitive, with many veteran investors paying in cash. You will want to be able to compete with these investors who have great knowledge of the market, who know when new properties become available and have the ability to make an immediate offer.
You need the freedom to be able to jump at a great deal before someone else gets ahold of it. As they say, the early bird gets the worm, and you don’t want to be waiting on the bank’s red tape while your dream home slips away.
Look For A Lender Who Will Provide Repair Assistance
Some lenders will consider a loan on a foreclosed property so long as you are able to show that the property will have a much higher value after some repairs. Some lenders will even offer repair assistance if they feel there is potential for a high return on the home.
Do ALL Your Homework
Some investors will bid on a foreclosure without ever seeing it. They plan on gutting the house and redoing it for a quick flip, so they don’t take the time to see the house for themselves. By going to see the home yourself, you will be able to see a lot more than what the pictures tell you.
- What are the other houses in the neighborhood like? Are the other houses owner occupied? Are the homes well maintained?
- Maybe the listing agent took pictures hastily and forgot to mention the 2 car garage or the new covered patio in the backyard.
- Know what other homes are going for, as well as the history and demographics of the area.
- You should always have an inspection done, so you don’t end up buying a “Money Pit” house!
Work Directly With The Listing Agent
The agent listing the home is likely to have a familiarity with the bank and understand exactly how they work. Go directly to them and find out what the bank is looking for and the best way to get your offer to them.
The agent will have a relationship with the asset manager at the bank who can approve or deny the sale. Form a relationship with a listing agent who specializes in foreclosures.
Often times they can add you to a list, letting you know when new properties are available. Working directly with the source will save you a lot of time and money.
Look On Government & Bank Websites
Foreclosures owned by both the Department of Housing and Urban Development and all the major banks are available on-line. These properties are often also advertised through a listing agent, who you can contact directly with your offer.
These lists are updated daily and many offer email notifications if something matching your criteria becomes available.
The bottom line is you need to prepare for an impersonal, and competitive process. Think like an investor, and do not get so caught up in “getting a deal” that you pay more than you should!