Finding low-priced properties across America comes down to looking at foreclosure stats across the country. Foreclosures are bank-owned properties being sold at less than market value to recoup the cost of the former owner’s loan amount. Foreclosure data can give potential homeowners a good idea where to find a deal in the current housing market. A look at data from 2018 shows that foreclosure homes in Miami have moved up a spot to be fourth on the list. Only Chicago, Philadelphia, and Cleveland outrank Miami as the city with the most foreclosures per capita. These top ten cities are the best place to start looking for foreclosure deals.
Chicago, Illinois
Chicago and its suburbs claim the top spot on the list of cities with the most foreclosures. ATTOM Data Solutions says 5,148 properties had at least pre-foreclosure filings in 2018. That’s more than 2,000 more filings compared to the next city-suburb area on the list. If you plan on buying a foreclosed home in Chicago or Illinois, get a real estate agent that specializes in foreclosures. Illinois has some tricky rules surrounding foreclosures and how they are executed. You will want as much guidance as possible during this process.
Miami, Florida
While both Philadelphia and Cleveland rank higher in the number of foreclosures than Miami, Miami is fast-growing. The real estate market in Miami has been careening out of control since 2012 as the economy began to bounce back from the 2008 recession. Florida is also pretty lenient with its waiting period for closing on foreclosed homes, making it friendly to foreclosure buyers.
Houston, Texas
Houston is another area deeply impacted by foreclosures. The recent natural disaster caused by Hurricane Harvey has caused the number of foreclosed homes to spike in the coastal city. These homes are often severely damaged from flooding and might require special care to make habitable again. You should be careful with a Houston foreclosure. Some foreclosure rules state the house must be sold as-is and without inspection from the buyer. These can be red flags that you’re getting a property that will cost much more down the road to maintain.
Finding a Foreclosure Expert
No matter where you look for foreclosures, you should always have a real estate agent experienced in the foreclosure process. Some deals are handled through an agent acquired by the properties’ original lender. These situations are not ideal since you cannot share your intentions for the house with a real estate agent like this. You should not tell an agent representing the lender whether you’re willing to spend more than you offer to obtain the house.
Plan for Problems
Legal challenges to foreclosures can prevent the sale of them in some states. You should plan for unforeseen problems that can come with a foreclosure. Your attorney should help explain the process of buying a foreclosed home in your state. The process can be vastly different across the United States. You should understand that you may need to set aside a hefty sum for legal fees associated with obtaining full ownership of the foreclosed home.
Pricing
An experienced foreclosure real estate specialist will be able to show you the closed sale price of homes comparable to the one you’re buying. For foreclosed homes, you should always start with an amount well under market value. Most banks who hold titles to foreclosed properties are eager to get rid of them and will let them go at a massive discount.
Financing
When it comes to financing your foreclosure purchase, you should have your method sorted before you plan on buying. Most mortgage lenders require preapproval letters alongside the purchase offer. You should have cash on hand for any offer you make to stop yourself from losing out. Foreclosed homes tend to go quickly since they are such a good deal.
Foreclosure State
Most foreclosures are in a state of disrepair since homeowners stop maintaining the home well before they stop paying for it. Some lenders might do minor cosmetic repairs to the property to help it sell, but these are not substantive repairs. You should count on having significant repair and renovation costs that come alongside buying a foreclosed home. As is purchased means no repairs will be done to the property before it is turned over to you. Homeowners who are looking at an as-is foreclosure should order a home inspection from a third-party contractor. A pest inspection and a home warranty might be a good choice, too. Be familiar with the environmental hazards that are common in your area and inspect for those. Some foreclosures in states do not allow these types of inspections, so make sure it’s within your rights as a buyer.
Never Buy Sight Unseen
It can be tempting to buy a foreclosed house in a state across the country if you’re getting a good deal. However, you should never buy one of these properties sight unseen. You should always see the property yourself before you buy it, so you know the house’s condition. Aside from looking at the condition of the house, you should also pay attention to the neighborhood. If the home is located in a terrible area, then you might have problems selling it later down the road. High-crime neighborhoods may be one reason why the foreclosure is so cheap.
Foreclosures Are Not Quick
No matter where you buy your foreclosed home, you should not expect a quick sale. Foreclosures tend to take longer than traditional sales because of the extra regulatory hoops to which both seller and buyer must adhere. There are extra hoops for anyone considering buying a HUD house. As you can see, the process of buying a foreclosure is much more involved than buying a traditional home. You should have an expert at your side and have cash in hand for any home you’re considering buying. Foreclosure data across the United States is released on a quarterly basis, so stay up to date with this data as long as you’re looking at the foreclosure market.
