Several people are flocking to the market for foreclosed properties because of their affordable prices.
Planning to buy a foreclosed property? Read this first for guidance from Toronto Mortgage Broker Rakhi Madan. She has listed the important points you must consider prior to taking the next steps.
Get Preapproved for a Mortgage
Acquire a preapproval letter from a viable lender. Through this letter, you will have an idea on how much money you can borrow. Some people who plans to buy foreclosed properties search for a property first and then think of the financing later, which is totally wrong. Since foreclosed properties are quick to sell out, it is highly recommended that you have your finances planned out before you start searching for a property.
Location
The location is another factor to consider in purchasing a property, may it be foreclosed or not. In most cases, location determines the property’s profitability. In considering a certain property, it’s important to check if the area has a viable growth area or will soon be an area with high growth as this will point to a high potential for appreciation. Other vital factors to look for are accessibility, electricity, water and security.
Property Condition
One must also consider a property that’s structurally durable and if possible made of concrete and durable materials so it would last for a number of years. However, when acquiring foreclosed properties, it’s not uncommon to see some that are not well-maintained and in need of repairs. Remember, repairs could add significant value to a property, which could cover related costs. It is also important that properties that need extensive repairs must be avoided.
Prepare to Spend Extra on Maintenance
Consider repair costs in your budget, since foreclosed properties are normally sold “as-is”. One must remember that many bank-owned properties are usually in bad shape and they will not make any repairs before it is sold, and it is not likely to reduce the price to compensate you for possible repair cost you’ll sustain.
Ensure There Are No Outstanding Liens
Before purchasing a foreclosed property, you may want to do a title search to check if the property has other strings attached to it. The previous owners may have more than just the mortgage that they could not pay such as homeowner’s association dues or property taxes. To get such information, you can always check court records or hire a title company or lawyer to check for liens.
Contact Rakhi Madan Mortgage Agent for mortgage help in the Greater Toronto Area.