Buying Houston bank foreclosure homes

I know you want to get started with the process already, but I would like to start with a question, if I may: Why do you want to purchase a foreclosure?

It’s okay to say it: You want a real deal! A foreclosure that has everything you are looking for in a home plus some good built in equity so when and if you decide to sell later, you would make a profit.

Now that we’re on the same page, we can get to the good stuff. (Foreclosures are my neck of the woods, so I’m quite excited about writing this post.)

~~All Foreclosures are Bargains~~

Possibly, the biggest myth about foreclosure properties is that every bank foreclosure home on a market is a bargain. Just to give you an idea how wrong that common perception is, just consider the fact that 95% of foreclosure homes in the Houston real estate market are a far cry from being bargains. They are either being sold at market value or discounted just enough to account for the repairs that they need to be brought to move-in condition. But then, there is that 5%! Those diamonds in the rough, deeply discounted 20, 25 or even 30 percent lower than their true market value, are what makes our day. And if you are looking for that deal… this is what you need to focus on.

Is it any different?

The questions I get most often from our clients revolve around whether purchasing a bank foreclosure is any different than buying a regular (non foreclosure) home. The short answer to those questions is: Not Really. First, bank foreclosures come with the same assurances that regular homes offer in terms of an insured clear title. In other words, when you purchase a bank foreclosure, you an be sure that the title to the property is clear of any liens, back taxes or any other issues of that nature. Second, when you enter into a contract to purchase a foreclosure, you are purchasing the home “as is” but are alloted a certain period of time to perform inspections on the property. Depending on the bank this period can vary from 5-10 days. If serious issues are discovered during inspections, you would be able to get out of your contract. Third, most bank homes can be financed through regular mortgage loans under the same exact terms (i.e. interest rate, down payment, closing costs) as a regular home.

Any handyman skills?

Equity is the ultimate goal, but it is not the only factor you should consider before making a move. Foreclosures come in all conditions ranging from “dump” to “has anyone ever lived here”, and your decision should be dependent on:

Your handy(wo)man skills

or in their absence

Cash on hand to pay appropriate contractors

If you don’t possess neither, don’t worry. This just means that your foreclosure search will be limited to properties in good condition and the good news is that there are plenty of those in the Houston market today.

Open Mind Required

If you are looking for homes in showing condition that smell good and their AC set at a comfortable 70 degrees, let me save you a trip. Most foreclosures will be littered with trash, will smell like something that’s been vacant for quite some time and won’t have power, (therefore no AC). But if you are hunting for a deal, let me tell you that trash is your best friend, so try to keep an open mind. If the biggest issue with your foreclosure prospect is that it is not clean, you may have a gem on your hands. Instead, if you are looking for a home packaged in a tidy little “bow”, the retail section of the store is in a whole another building!

Don’t go at it alone

If you want to see what it takes to consistently discover those great foreclosure properties … those in that 5% category with great equity… pass by our office around 9 AM and you will see the amount of time and effort it takes for trained pros to do it. The biggest piece of advice that I can offer you today, is to not go at it alone. A real estate agent that specializes in foreclosures would be able to provide you will good prospect properties so you don’t have to go through the laborious process of finding them. That way your time would be spent sifting through good deals versus wasted over figuring out if in fact you are getting a deal. Note: When you buy a foreclosure, all fees to all agents involved are paid by the bank, so if effect you get a specialist on your corner for free.

Keep these tips in mind when you are out in the hunt for that special foreclosure deal. And most importantly: Enjoy it!

: Check out our Houston Foreclosures