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What Types of Bargain Houses Exist?

By Jeanette Joy Fisher

To make a good profit in real estate, you must buy right. Check out all property types available to find the best transaction for your specific situation. Consider fixers, distressed sales, repossessions, multiple listings, for sale by owners, and vacant properties just wasting away. Distressed Properties Recognize the difference between a fixer and a distressed property. Distressed properties may be fixers or just unwanted houses. Divorce, job loss or transfer, death, financial difficulty, and other problems often force a sale for less than market value. Just because an owner's problem causes a distressed sale does not mean the house requires fixing. Repossessions Although the repossession market seemed dried up last summer, houses are beginning to appear on foreclosure lists again. Lender Rob Kramarz with Nationwide Mortgage (www.seetloan.com) says that this may be the beginning of another real estate investor boom. Look for great bargain properties for sale by HUD, VA, Freddie Mac, Fannie Mae, and Bank-REOs (acronym for real estate owned). Follow your local government-owned properties and make many bids. The key to winning ONE successful bid is frequent bidding. Many real estate agents try to discourage you from repos and switch you to multiple listed homes. Do not listen to negative agents who tell you how hard it is to find a bargain property. Find another agent. Even in a hot market, when the average house sold in less than three weeks, we found two properties for forty thousand dollars under market value.  Foreclosure REO Banks often offer their "real estate owned," REO homes, at bargain prices. Depending on the bank's resale policy, conditions of the property, and available financing, REO opportunities vary widely. Several banks lend on their repos while other banks just want out. Great financing becomes possible through the banks who offer in-house terms. Ask for no points, minimal loan costs, and no prepayment penalties. Check with your local lending institutions and find out how they market their repossessions. Many of these bankers will give you their web page listing available property. Befriend real estate agents who specialize in listing bank-owned repossessions so they will notify you of a new listing immediately. Multiple Listings It is hard to find a bargain in multiple listings, but not impossible. Check out listings which have been on the market for awhile. Look for vacant houses, as these cost the seller money every month. Make an offer for much less than asking price with a quick escrow. Many anxious sellers jump on an offer if they think they will be out of their problem in only ten days. This is another reason you need a lender and an escrow officer who perform fast. We follow the multiple listings in our area on the Multiple Listing Service. One of our agents emails me new listings daily. You need an agent who calls you the minute a new distressed property listing becomes available. Under-priced listings mostly get snapped up by the real estate agents and their investors before they make MLS. Just like making many HUD bids, make many offers. You never know when a seller's problems reach a critical point causing abrupt action. For Sale by Owners Houses for sale by owner may not always be a great buy, but there is always at least one bargain out there. Many investors prefer buying directly from the owner. If you have ever tried to sell your home by yourself, you probably met some of these investors. Cruel, hard, and in some cases, fraudulent investors dream up all kinds of schemes to steal houses from distraught homeowners. Understand that the home seller most likely dealt with these callous investors before you and therefore may view you with suspicion. Earn their trust by working with them honestly and compassionately. Bargain houses offer you the fastest way to gain instant equity. Check out your local market to see what types of available bargains await your winning bid. Copyright © 2006 Jeanette J. Fisher How to Buy a HUD Repo Real Estate Investing Business Plan Get all the tools you need to start your real estate investing business.   Return to Real Estate Investing Articles

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