Strategies to buy St Louis Foreclosed properties
Foreclosure implies selling off the property of the mortgage borrowers who were suffering because of financial distress that led them to default on their loans. As a result of a loan default, lenders are within their rights to foreclose the borrower’s property and retrieve their loan money. Generally, in St Louis a foreclosure proceeding begins with the filing of a NOD (or Notice of Default). This has to be done at the office of the County Recorder.
Once a foreclosure proceeding is over, the property is put up on sale by the lender. These properties are bait for investors to buy real estate assets at a very low cost. However, one needs to follow a standard guideline when buying such homes.
Steps to buy St Louis Foreclosed properties
Investors and second homebuyers should follow the below mentioned guidelines endorsed by the real estate fraternity:
- Personal visit – Investors must make out a schedule to pay a personal visit to the foreclosed property they intend to buy and inspect its condition on their own. If the buyer is an outstation candidate, then he should hire a competent person to do the job of evaluating the property’s actual worth.
- Financial strength – Foreclosed properties are sold at a price lower than the actual market so they are sold off faster. However, buyers of such properties should exercise caution while clinching the deal. They must be prepared with the essential resources to buy them and to handle the same after making the purchase. For instance, buyers should have the capital to spend on the property’s development and the ability to bear the maintenance costs later on. Moreover, one needs to evaluate the several risks, like absence of tenants, associated with real estate properties before making the investments.
- Property location – Though St Louis has a good neighborhood status, yet it is extremely important to judge the nearby sites before selecting a foreclosed property. This is because a property may be located in an area that is plagued with anti-social activities or may be rife with a good number of foreclosures, which may pull down its market value. It might prove to be a white elephant to own such a distressed property in a low profile neighborhood. Therefore, investors should take to the streets to study the locality of a foreclosed property.
- Professional inspection – Usually, it is a norm with the banks to conduct a thorough inspection of a property before they approve any loan application from its buyer. However, the same principal applies to those who are buying foreclosed properties on their own. This will give them a sound idea about the property’s actual value.
Moreover, a first-hand inspection will help him to avoid unnecessary losses and repair any minor cracks before it turns to be a major headache.
Benefits of buying foreclosed properties
Buying a foreclosed property has some unique benefits of its own, some which have been discussed below:
- Buyers will able to locate a cheap property quickly because foreclosed property sellers have great eagerness to sell off such properties as soon as possible.
- Sellers may offer attractive discounts and bear some of the closing costs with the buyer.
- During the pre-foreclosure period, sellers may perform the inspection at their own costs.
Moreover, buyers may be eligible for a mortgage loan at a great discounted price when they mention their plan to buy foreclosed properties in their loan application form.
Article posted by STL Real Estate, professional St Louis realtors