My Personal Finance Journey

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My name is Jacob, a husband to a wine-blogger wife, father to two bouncy-boy toddlers, and I'm the owner/author of My Personal Finance Journey. By day, I am a scientist working in bio-pharmaceutical development. Personal finance has been my hobby since 2007 when I started teaching myself through books (that finance B.S. degree didn't teach me much!). Learning how to save, adopt a frugal mindset, and invest my own money soundly has allowed me to have a savings rate > 50%, increase my net worth by > 20 times, grow my career, and always do what I love. Check out the About Me page to learn more!

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Tips For Buying A Foreclosed Property

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The following is a guest post by editors at SmallBusinessLoansDirect.com. Enjoy!

Tips For Buying A Foreclosed Property

It’s no surprise that the U.S. housing market is in shambles.  The eruption of the Sub-Prime Mortgage Crisis and the popping of the real estate bubble in 2008 has led to millions of foreclosures in the United States.  RealtyTrac estimates that a record 3.8 million homes were foreclosed in 2010.

These record high foreclosure rates in 2010 were due to a deadly combination of high unemployment, wage cuts, price inflation in many goods and services, and many people getting overextended using easy unsecured working capital loans.  As gas prices continue to rise in 2011, and unemployment continues to remain above 9%, the housing market will most likely continue to remain under pressure.  These horrible market conditions have created a dream come true for one segment of the market, however—the homebuyer.  We are currently in a buyers’ market like no other in history!

Debunking A Myth


If you are in the market to purchase a new home, you may want to consider a foreclosed property.  Navigating through the process can be tedious, and it can be best to hire a qualified real estate agent who specializes in distressed property acquisition.

One of the stereotypes of foreclosed properties is that they are all completely trashed.  The traditional line of thinking is that if a person was irresponsible enough to lose their home in foreclosure, then they probably did not maintain it very well.  This myth has been completely debunked in the current crisis, however.  In today’s market, the worst recession since the Great Depression has forced millions of well-meaning Americans into foreclosure, and now there are homes in excellent condition selling at a fraction of their market-high prices.

How To Find Foreclosures


Foreclosures will generally be listed as public announcements, so the county courthouse is a great way to keep abreast of foreclosed properties that are up for auction.  Another way is to search the internet for reputable sites that post foreclosed property details.  These sites will generally require a monthly membership fee, so make sure you do your due diligence and choose one with solid user reviews.

An experienced real estate agent can be your closest ally if you are attempting to find a good foreclosure.  An agent will also generally track down any good leads and make sure the property meets a few your general criterion before you have to spend time checking it out, and this can save you lots of time over the course of a house search.

Finances


Financing a foreclosure can be a much trickier process than a traditional home purchase.  Again, this is where a qualified professional can help tremendously.

There have never been as many homes for sale and in foreclosure in the history of the United States property market.  Now, more than ever before, is a great time to find a good deal.

How about you all? Have you ever bought a foreclosed property? If so, would you recommend it to others? What were the positives and negatives?


Share your experiences by commenting below!

Jacob’s Thoughts – Listed below are my random thoughts as I was reading this article.

  • @ 3.8 million foreclosures in 2010 – This is astounding! How many homes can there be in the US after all, considering that there is about 300 million people living here? That’s like 1-2 people out of 100 affected! Do you know anyone that had to foreclose on their home?
  • @ Idea of the housing market still being under pressure in 2011 – I absolutely believe this. In my condo community, none of the units on my row have sold in the past year that I have lived here. Simply amazing! Let’s hope the market turns back around by the time I have to sell in around 2015 or so.
  • @ The stereotype that all foreclosed properties are trashed – I encountered this when I was searching for a house as well. What would happen is that I would find a property listed on the MLS system, and when I reviewed it with my real estate agent, she basically, immediately advised me to avoid the property. I wonder why this is? Maybe they have had some bad experiences with clients being unhappy with the results of buying a foreclosure and just want to “play it safe?” Any ideas?

***Photo courtesy of http://farm4.static.flickr.com/3235/2539334956_87cef7e457.jpg

About the Author Jacob A Irwin

Hi folks! My name is Jacob. I am the owner and operator of My Personal Finance Journey. I started this blog in January of 2010 and have enjoyed the journey ever since. Since finishing up graduate school in Virginia in 2014, I have been working in biopharmaceutical development in Colorado. You can read more about me and this site here​. Please contact me if you have any questions!

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  • Miss T says:
    May 27, 2011 at 2:37 pm

    As a Canadian looking for investment opportunities, I have considered looking into forclosed homes in the US. However, realistically the travel alone to go and work on the place and use it make it less cost effective. If I lived closer than I would consider it more seriously.
    My recent post Save Taxes- Negotiate A Reduction in Your Assessed Value

    Reply
    • MyPerFinJourney says:
      May 27, 2011 at 10:08 pm

      Thanks for sharing Miss T! Are there a lot of foreclosures currently in Canada? I wasn't sure if you all had been hit less hard.
      My recent post Find Out Your Credit Score For Free With CreditKarma And An Analysis of My Results

      Reply
  • optionsdude says:
    May 26, 2011 at 2:33 pm

    Considering there are 300 million people in the US, I would suspect that there must be at least 3-4 people per home. Single people usually live in apartments so the actual number of houses affected is probably more on the order of 3-5%.

    I have never been in a foreclosed home that wasn't trashed to some extent. I would plan on repainting, reflooring, and making other minor repairs at a minimum in the cost of purchasing a foreclosed home.
    My recent post Green Mountain Coffee Roasters- A Good Case Study for Put Options

    Reply
    • MyPerFinJourney says:
      May 26, 2011 at 7:32 pm

      Thanks for sharing optionsdude! So overall, with the foreclosed houses that you've seen, do you feel they could still be a good investment, even including the increased repair costs?
      My recent post Tips For Buying A Foreclosed Property

      Reply

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