Tips for Buying Foreclosures in Phoenix

ForeclosureInvestmentsForeclosure properties are notoriously risky investments, but as any investor knows: the greater the risk the greater the reward. Phoenix home investors must be willing to take a chance on a home oftentimes sight-unseen to reap the biggest benefits. Foreclosures usually require some sort of repair after purchase, but that cost is generally minimal compared to the benefit investors gain when market appreciation is taken into account.

There are many stages of foreclosure and the stage within which you buy will color your investment experience. If you purchase a home during pre-foreclosure, or when a homeowner has only missed a mortgage payment or two, the buyer is generally very motivated to get rid of the house. A motivated seller means the sale will move quickly and Phoenix home investors have the opportunity to get the property for below-market prices.

Sellers in the pre-foreclosure stage are also more likely to make requested repairs if they are financially able, since they are in such a hurry to unload the house. They may also choose to cover closing costs to entice buyers. This makes the home an attractive purchase, so investors will need to move quickly to avoid losing the house.

Buyers may use regular mortgage financing and are permitted to obtain inspections within the standard period of due diligence just as they would with any regular sale. These purchasing options make foreclosure investments in Phoenix attainable for anyone in the market for a new home and may even allow home buyers to purchase in an area they might not otherwise have been able to consider. This is a great way to get the most home for the least amount of money (in the nicest area possible, too)!

Foreclosures purchased at auction are another story altogether. Once a home is officially foreclosed, it belongs to the bank and the sale is taken away from the previous owners. This is an emotional time for homeowners, as they must leave their homes unwillingly. It is not uncommon to find damage in the home caused by the previous owners intentionally or from repairs and maintenance they simply could not afford to keep up. Additionally, buyers must be leery of back taxes, mortgages or liens they will “inherit” from previous owners with the sale. Do research before purchasing any home from an auction and have cash available, as most auctions will only accept the full payment amount on the day of purchase. Mortgages are typically not permitted with auctioned homes, as the bank is trying to recover their money quickly.

Be realistic about the condition of a house when purchasing from auction, but don’t let that deter you altogether. Wise investors know to have extra money on hand to fix any undesirable conditions within the home. When the price is right, it can still be highly beneficial to purchase a foreclosed home. Market values can still rise to make the significantly reduced purchase price worthwhile. A professional real estate agent can help guide you toward foreclosure options that fit your investment needs and are likely to pay off in the long run.

Don’t be afraid to invest in Phoenix foreclosure properties! With a little guidance, the right timing and a lot of luck, anyone can become a property investor. Call or text All Homes AZ today to talk about beginning a journey to your investment goals today.

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