When Buying Foreclosed Properties, Don't Forget These 5

in Property
Perhaps this is first time youve encountered Foreclosed Properties in the Philippines, perhaps youve been investing in real estate properties for years whatever reason you have for ending up on this site, here are a few of the things you need to know about foreclosure (or maybe you already know them? How about a refresher?)

1. Do you know the reason youre buying a foreclosed property? Ask yourself if you have enough money to buy the property more than the indicative price as you have to factor in the taxes involved as well as repair of the property (if any). Are you willing to go through all the paper work to procure the property? If you dont have the patience to inspect the property, or fill up the necessary application forms and fulfill requirements, maybe foreclosures isnt for you.

2. There are 3 ways to buy foreclosed properties, and each have their own procedures in procuring the property:

a. At an auction, where to win, you have to outbid all other bidders for the real estate property

b. Pre-foreclosures, where you buy the property from the owner before the bank acquires the property

c. From a bank, through first come first serve or through bidding.

3. Due Diligence is A MUST. Do not rely on pictures and decide then and there to submit a proposal. Dont be the one left surprised when you find out the property you won at a foreclosure bidding has liens/encumbrances more than you bargained for (oh youll be shocked at the number of times this has happened).

*A lien is a legal claim against a property. Examples of liens: unpaid contractors, unpaid association dues, mortgage, loans, etc. If you buy a foreclosed property (and remember foreclosed properties are sold on an As is where is basis,) youll be the one responsible for these liens!

4. A lot of foreclosed properties, in our experience, needs repair. When a homeowner is driven away from their houses, its normal, but rather sad, that they bring items with them from a small door knob, to actual wooden panels or doors. Hire a professional to inspect the house/property first before you decide. The repair necessary might be bigger than the actual amount youre paying for the property.

5. Sometimes a former tenant or the former owner is still there and cant be asked to leave! They can either be hostile to people viewing the property, or be surprised that when asked nicely, they will give you access. If you decide to purchase a property with a former tenant or owner, youll be the one to evict them after you receive them so be
prepared for the expenses involved (and they can cost a pretty peso!)

To be completely honest, buying foreclosed properties is not recommended for first-time home buyers, and best to leave it to the pros. However, if youre willing to go through the process of buying foreclosures, while keeping in mind youre charging everything to experience, you just might enjoy and probably engage in another purchase! Good luck!

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Andreina Martinez has 1 articles online

Andreina Martinez is hoping to be a Foreclosed Property in the Philippines maven and it starts by making her first real estate investment. Wish her luck!

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When Buying Foreclosed Properties, Don't Forget These 5

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This article was published on 2011/04/14