Using Technology to Save Time
Finding and purchasing foreclosed property is much easier today than it was years ago due to the technology advancements and the internet. Various internet websites, such as www.TheOfficialForeclosureList.com can provide you with extensive lists of properties that are in some stage of foreclosure. Other websites are available to provide you with comparable sales in the area, an estimate of the property, liens against the property, and then if you are still interested, you can use Google Earth to get a street view – all from your office or the comfort of your home. Using various sources of technology, one can explore and evaluate multiple properties at one time; thus, being able to plan a productive and efficient road trip.
The county website, if you know the street address or parcel number, will provide you with a history of the property as well as any mortgage information which may help you to get a head start on the purchase of the property. The parcel information will also provide a footprint of the property, although it may not show any recent additions. It will also provide the construction materials, age, number of rooms, and tax information. You will be able to see a list of the transactions on the property, including the purchase prices, giving you an idea if this is a property that has been flipped numerous times, and if the prices were climbing or falling with each sell. With some practice, you will be able to discern what a fair offer to the mortgage company might be. While not completely accurate, the county website can provide extensive information about the property to help in your decision.
You want to pay particular attention to the tax information because tax liens are first position liens, meaning that they govern over all other liens. In some states, it is possible for a person to acquire ownership of a property either by holding the tax certificate for three years, such as in Alabama, or by purchasing a tax deed at an auction, such as in Florida. Tax liens, when redeemed, can pay as much as 24 percent interest to the investor, depending on which state you are in, and are very attractive investments for people of any financial stature. So you definitely want to know the property tax situation and get control of it before you begin investing too much money and time in the foreclosed property investments that you are considering. There is nothing any more important than doing your due diligence ahead of time and thoroughly.
For properties in which you are interested that are located out of town or out of state, and have passed all of the tests which you have conducted on it, you can use Google Earth to get a street view of the neighborhood and property. Granted, Google Earth rarely reflects the most current information in many neighborhoods, it will still give you an idea of what to expect, and an opportunity to check comparable prices on that street using other web tools.
If you are still interested in the property after all this research, now is the time to plan your trip to view the house in person. First, do a drive through the neighborhood and really look closely at the the conditions of the other houses. Are many vacant, for sale, unkempt? Next, return to the house and take a walk around it, investigating everything that you can from where you stand. Peer through the windows; look for soft spots in the trim and siding, graffiti, etc. If still interested, now is the time to call the local realtor who is assigned to this property so that you can take a closer look inside. If this is a foreclosed property that is being auctioned, online or in public, and you are not able to get a tour of the inside, you should still feel pretty confident in the due diligence you have performed and know if it is a property that you wish to pursue.
As with any auction, be sure you know the comparable prices of recently sold homes in the neighborhood, have a realistic budget for the rehab of the house, including staging for resale. Using this information, you can back into your maximum bid amount. Auctions can be competitive, raising your adrenaline, so be careful, use discipline, and stick to your budget. The object is to maximize your profit and to do so you must minimize your expenses. Remember, if you do not get this property, there will always be another one.