REALTOR® Magazine-Daily News-Snag a Bargain: Foreclosed Properties

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Daily Real Estate News | March 12, 2008 | Snag a Bargain: Foreclosed Properties
Now’s the time to pick up properties at fire sale prices, says Ralph R. Roberts, author of Foreclosure Investing for Dummies and Flipping Houses for Dummies.

"Properties could double in value over the next 10 years. But you have to be willing to go in, buy them, and hang on for the longer term," he advises.

Roberts, owner of Ralph Roberts Realty in suburban Detroit, who says he has bought and sold more than 2,000 foreclosed properties in his career, says profitable investing in foreclosures requires exhaustive records searches in advance.

Roberts recommends that buyers of foreclosures create a file that contains a range of property information that will establish what the property is worth and help avoid bureaucratic snafus.

Here is his list of must-have information:

A copy of the foreclosure notice, or notice of default.
Title commitment and a 24-month history in the chain of title or the last two recorded documents.
Deed with the current home owners' names.
Last recorded first mortgage, so you know how much the current home owners owe.
Documentation of all liens against the property, including property tax liens.
Map showing the location of the property.
Exterior home inspection (with photos and videos), plus neighborhood photos.
City worksheet on the property showing all repairs, inspection reports, and other information.
MLS data showing how much comparable homes are selling for in the area.
Tax bills.
SEV (standard equalized value) of the property, on which property taxes are based.
Any notes documenting conversations with neighbors.