Acquiring bargain priced real estate at Wilmington, DE foreclosure auctions is what smart Delaware investors are doing with their money right now. In fact, government HUD foreclosed homes are also great investment opportunities as well. Any cash buyer or qualified buyer who can obtain financing can purchase HUD foreclosed homes. For non-government foreclosed homes, you will need cash to purchase them at foreclosure auctions. Realtors can represent you when you purchase a HUD foreclosure. HUD will pay their commissions. Generally, Realtors are not involved at non-government foreclosure auctions. You will need to bid on your own. You might want to consult with a real estate attorney first before you bid for properties at auctions so you are familiar with the Delaware foreclosure laws. Some new investors will bring an experienced investor with them the first time they bid at an auction so they don’t make any costly mistakes.
As Is Condition
All foreclosure properties, whether they are non-government or government HUD properties are sold in an “as is” condition. This means that they are sold in the condition that you see them. No repairs will be made. Therefore, it is extremely important that you conduct inspections and visually look at the properties. Many are in poor physical condition and need extensive repairs. You can find some properties that are in better condition as well, but you need to do your due diligence. Since the properties are sold rather cheaply, you may still want to consider purchasing a foreclosure home that needs major repairs if the repairs do not exceed your profit margin.
The great thing about buying foreclosure auction properties is many times you can get them for pennies on the dollar. There are single family homes, townhouses, condos and commercial properties that are auctioned so you should be able to find what you want. However, there is a lot of competition for these properties. Sometimes buyers at foreclosure auctions get caught up in the excitement of bidding so before you decide to attend a foreclosure auction, make sure you check homes prices in the Wilmington neighborhood where the property is located so you don’t end up overpaying for your auction property.
REO’s
Foreclosure auction properties that do not sell at Delaware auctions are bought back by the banks that foreclosed upon them and offered for resale as REO’s. REO’s are also good opportunities to purchase bargain homes because they are sold at or below market value. The good thing about REO’s is you can obtain title insurance and inspect them. Properties purchased at foreclosure auctions do not qualify for title insurance. Also, you may be responsible for paying off liens. With REO’s, the banks have already paid off the liens when they acquired title back. REO’s are listed with local Realtors, who represent the banks that own them. You can make an offer through the listing agent or work with your own buyer’s agent. The bank pays the Realtor’s commissions. You can finance an REO so you don’t need all cash to purchase the property.
With so many affordable foreclosure properties now in the Wilmington area, investing in foreclosed homes makes sense. Interest rates are still low if you need financing for your HUD foreclosure or REO, and inventory is high. It is truly a great time to find cheap foreclosed homes if you are looking for a property with built in equity. Rental properties are in high demand in the area as well so you might want to rent your foreclosed property out after you fix it up and hold on to it for awhile until prices rebound.
