Not too many years ago, foreclosures made up about 8% of home sales in Austin. Now foreclosures make up under 0.5%. Bank owned homes and foreclosures in Austin, even though scarce, still attract many home buyers looking for a deal. We’ve not only helped several buyers buy foreclosures over the years, we’ve also bought them for our personal homes, as well. If you want to be one of the lucky few to score a foreclosure in Austin, here’s our How to Find a Foreclosure in Austin Guide.
Expand Your Geographic Search
To have the highest chances for success, expand your search to the largest geographical area you would consider living. With so few foreclosures that come up, the larger area you search, the more likely you will be to find one.
Have the Patience of Mother Teresa
Patience is the number one attribute successful foreclosure buyers have. With less than 0.5% of home sales in Austin being foreclosures, they don’t come up everyday. If you want to buy a foreclosure, you need to have the patience to wait for the right one to come up. That process can take anywhere from a few weeks to several months depending on the area and price range you’re looking.
Set Up Email Alerts
Save yourself some time and set up automatic email alerts that will email you as soon as a foreclosure in your area and price range is listed. This way, you can go about your daily life and not have to worry about checking new inventory.
Have a Flexible Move Timeframe
If you have to move by a certain date and you’ll be homeless if you don’t find a house, a strict foreclosure buying strategy may not be for you. Since it is uncertain when a foreclosure in your area might come up, you might want to open up your search to both traditional sales and foreclosures. If you have a flexible living situation and can wait until you find the right foreclosure, a foreclosure buying strategy is perfect.
Become an Expert at Hurry up and Wait
Often foreclosures don’t stay on the market too long, especially if they are in highly desirable areas and are priced well. When you see a foreclosure that you’d like to buy, be ready to act quickly, so you won’t miss out. But, also be ready to wait … and wait … on the bank’s response. Though banks want buyers to act quickly, they act on their own time schedule. Calling and asking for updates will only get your offer thrown in the garbage. In this case, patience is the best strategy.
Get Fully Pre-Approved Before You Start Your Search
If you need to get a loan to purchase a foreclosure, you’ll want to get fully pre-approved before you start looking. Banks are very strict when it comes to requiring pre-approvals from buyers. If you aren’t fully pre-approved, the bank will not look at your offer. Period. Getting pre-approved can take a week or so, so it isn’t something you can wait until you find the right foreclosure to start. Get a pre-approval as soon as you start your foreclosure search. If you’re not prepared, the foreclosure you’re looking for will come up tomorrow and you’ll lose it.
Talk to Your Lender About Strategies for “Uninhabitable” Homes
If you’re planning to get a loan to buy a foreclosure, you’ll want to speak to your lender about homes lenders deem “uninhabitable.” In order to lend on a property, a lender is going to require a working stove, toilet and heater to make the property “habitable”. Banks who own the foreclosures won’t allow you to do work or make repairs to the property before you are the owner and lenders won’t lend on a property that doesn’t have these basic functions. We often see foreclosures that are missing one of these three habitability requirements and if you need to get a loan, it will have to be a special type of rehabilitation loan. Talk to your lender so you know the costs and can determine if this type of foreclosure would be a viable option for you.
Review the Bank’s Rules and Follow Them to a T
Every bank has rules covering everything from what they will and won’t agree to in a purchase contract, who is responsible for turning on the utilities, how long they will wait to respond to offers, etc. The rules aren’t the same for every bank, so you’ll want to read whatever instructions are given for each foreclosure and follow them to a T. Not following them is another good way to get your offer thrown in the garbage.
Be Prepared to Compete with Other Buyers
Foreclosures have always given buyers a lure of a deal. No matter the price range, foreclosures attract more buyers than traditional sales. These buyers are often competitive and willing to pay what it takes to make the foreclosure theirs. Buyers who lowball well priced foreclosures with multiple offers just to test the bank’s response won’t get a second chance to improve their offer. Understand the market and make competitive offers and you’ll have a better chance at being successful.
Be Able to Have a Vision of What the House Could Be
Many foreclosures need a lot of work and some need a hazmat cleanup team. If you are one of the few people who can see potential and what a house could be, that will open you up to many more choices than your average foreclosure buyer. These types of foreclosures don’t have as much competition, so you’ll have a better chance at being successful.
Hire a Realtor Who is Experienced with Foreclosures
A buyer’s agent who represents you and only you is an invaluable resource for a foreclosure buyer. They know how to craft your offer to get banks to accept them. They know the real estate market, the competition, and can help position you as the best buyer for the house. They can also show you what types of things need to be investigated and recommend professionals who are experts in home inspection. This way, you’ll understand what you’re buying and minimize the risk. Get an experienced buyer’s agent on your team early in the process, so they can help you make a game plan to best go about finding the types of foreclosures you’re looking for. Remember, buyer’s agents fees are paid by the listing company, so you pay nothing to hire your own Realtor.
Considering Buying a Foreclosure in Austin?
Our team can help! We have a combined 55+ years of experience helping buyers buy foreclosures. We know how the game is played and how to position your offers to get accepted by banks. We’ve not only helped our clients buy them, we’ve also bought them ourselves. Check out our How to Buy Foreclosures Guide for more foreclosure buying tips. Then, check out our Austin Home Buyers page to learn more about us and how we work. When you’re ready to get started on your search, fill out our Buyer Survey, call us at (512) 827-8323 or email us at info@11OaksRealty.com to schedule a no obligation consultation.