Tips in Buying Cheap Houses for Sale | -

Tips in Buying Cheap Houses for Sale

One of best sources of cheap houses for sale is distressed properties, homes whose owners have become default on their mortgage payments. Towards the end of the last decade, there has been a boost in the sale of distressed homes. According to surveys, one out of every three homes sold between the years 2008 and 2011 are distressed properties. If you take a look at areas where real estate prices have gone down like Florida and California, you will notice a large population of distressed homes.

In a distressed home sale (more commonly known as short sale), the price of the property is generally less than the amount of money owed by the homeowner to the lender. In this type of deal, you have to talk with the lender and the homeowner because the entire transaction may close before the lender starts with the foreclosure proceedings. Foreclosed properties are homes and structures that have been taken back or repossessed by the lender due to uncompleted mortgage payments. These properties are typically sold in the open market and tagged as real estate owned or REO or at auctions. Banks like to remove these homes out of their liability list and that is the reason why they are selling them at cheaper prices.

Here are a few tips when buying cheap houses for sale:

• Get yourself pre-approved for mortgage before pulling an offer on a distressed property.

• Be ready for serious competitors, most especially investors. Expect individuals who repair damaged homes and resell them at considerable markups called house flippers, bigger property management firms, and other people who have formed a liking to the property that you want.

• Get yourself a real estate agent who is experienced in dealing with distressed property sales. Keep in mind that distressed properties sometimes have a lot of problems and you would need a good real estate agent to sort these things out for you. Check for agent certification. There are courses available for agents who want to sell distressed properties.

• Refrain from buying from a neighborhood full of foreclosed properties. Choosing properties in a good neighborhood is always a great option and a good deal. People do not want to buy properties in depressed areas and even if the state of a property is still great, you may want to look somewhere else.

• Make sure that you hire someone to do professional home inspection. You need to have a thorough look at the property before you start spending for it especially if the house is for short sale.

Be ready for repairs. Some foreclosed properties may have been left with intentional damages and that is the reason why the inspection and readiness to repair are both imperative.