As the number of foreclosure, short sale and REO (Real Estate Owned/Bank Owned) properties hitting the market has increased, so has the number of investors. Loudoun County has seen a sharp increase in "distressed" properties and more and more investors and buyers are trying to get a "great deal" on their new home by buying a foreclosure. If you're one of those buyers, make sure you understand exactly what's involved and whether it's really worth it before you move forward...
- You can get a 5 to 15 percent discount, possibly more on the property
- Your choices and opportunities increase daily as the number of distressed properties increases every day
- If you are a handyman or contractor or have a connection to one, you can do all the needed work at much less than the market value of your improvements and potentially sell the property for a profit or have equity built in
Cons
- You must know how to search for them
- You have to be very patient - banks can take up to 2 months to give you a response back to your offer (yes, you read that correctly and yes, it really happened)
- You need to fully understand what it means to buy a property "as is". Those two little words have a huge impact on you
- You have to be a bit of a gambler. No matter how good you are with numbers, budgeting or forecasting, you never know what may happen with the market and whether you'll be able to clear a profit or end up losing money in the end, even with getting a 5 to 15 percent discount
Did we mention that you also have to learn a new language? Yup, you sure do. And new words and acronyms are added daily so you really have to stay on top of it. No, there's no official dictionary and yes, it's a pain. (Some, including myself, think that it's done to further confuse, not only real estate professionals new to the biz, but consumers in order to not let anyone new into "the circle")
For more information about foreclosure/bank-owned or short-sale properties to check out LoudounForeclosures.com or contact me directly.
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