In this article from We Buy Houses Cash Dallas, we will tell you what you need to know about working with the banks and credit unions on “how to buy foreclosures in Dallas, Tx. “
Maybe you’ve heard about people making a living buying and selling foreclosures. It isn’t something you want to just jump into. There are processes and strategies that are far different than buying a regular home off the MLS.
What Type of Foreclosure Do You Want To Buy?
The Short Sale
Here is where the lender has filed an absentee or substitute trustee. Once the substitute trustee has sent out the Notice of Default via the Sheriff’s office, they can then start the process to take the house. There are three stages of foreclosure, and each requires a different strategy. First, you have the house in Pre-Foreclosure, or, more commonly called a “short sale.” During this period, the current owner may still sell the home themselves in an effort to save them the pain of having the bank take their home. The homeowners are usually eager to sell but will want to recoup what they owe on the house so they are able to pay off the bank.
Owners in this situation do not typically have much time until the bank comes knocking at the door, so you’re able to find a great deal, and help a fellow homeowner save themselves from doing horrible damage to their credit. When working a short sale, and once you do find a buyer, you still need to pass the purchase offer to the bank to get the bank’s permission to sell at a lower price then what is owed. This is part of how to buy foreclosures in Dallas, Tx., and should the bank say no to this sale, they will also provide information as to why they declined the sale.
The Auction
Once a home is out of the pre-forclosure phase, there will often be a public auction of the home. You may have heard of this happening on the courthouse steps, and while some auctions are now done online, others are done in person, some still on the courthouse steps. Purchasing an auctioned home offers both great risk and reward. If you are working foreclosures more full time, you will have seen the property by the point of auction.
The bank can only get back what is still owed to them on the house, they are not allowed to make a profit. If you are able to find a hidden gem, you can find a great deal, paying the bank only a fraction of what the home is worth. There is much more on how to buy foreclosures in Dallas, Tx., if you are going to bid on any property at the auction, you must have cashier’s checks to purchase.
However, you must remember you are buying as-is. Some people think you are buying without a proper inspection, you could end up buying a home in need of extensive repairs or that in encumbered with liens. When working foreclosures, you will learn that you must keep up with the properties that you are interested in purchasing. Do your inspections while the owner is still living there. You will need to perform inspections on multiple properties, as not all properties make it to the auction block. So know which properties you are going after, this is part of how to buy foreclosures in Dallas, Tx.
(REO) Bank Owned Property
The third type of foreclosure is a Bank Owned REO (Real Estate Owned.) This is the most common as it is typically the easiest way to buy a foreclosed property. The bank will want to get this property off their books fast, however, the home will still be priced close to market value. You can definitely find great deals, but make sure the costs to repair and maintain the home don’t outweigh the deal you are getting. Here is how to buy foreclosures in Dallas, Tx. But you must have a solid plan of action in order to make contact with the correct person at each bank because each bank different in they’re heirarchy. I am here to tell you, you will never get through to the correct person at the large banks.
Things have changed in recent years, and some of the banks are hiring real estate brokers to manage and rehab single family homes that they think will bring back a good return, or at least get the balance owed the bank. First off, you must perform your due diligence on each person you make contact with, at each bank, not all banks will work with individuals or investors. We work with the smaller banks and credit unions. Regional banks and credit unions are a bit easier to work with and much easier to make contact with. You must have a strategy and work it quarterly when dealing with banks. We try to make contact at the end of each and every month. Usually the end of Q3 and Q4 are the best. This is only part of how to buy foreclosures in Dallas, Tx., when working with bank and credit unions.
Work With A Pro
If you are in the market to buy a home for yourself or your family, and you want to find the best opportunities, and how to buy foreclosures in Dallas, Tx., is sometimes you will want to work with a licensed realtor, only if you are not prepared to go for it alone with the banks and credit unions. They can help you to work with the bank, set your terms and navigate the process of purchasing foreclosed properties.
They can help you find deals as they become available, and help to steer you away from homes with potential problems. Again, we have found the more distressed properties the best, as we can purchase those properties cheap, fast and make more money on the retail side.
However, at the end of the day, you are ultimately responsible for the home you buy. This is why you will want to have your own, independent inspection done if possible.
If you are looking at how to buy foreclosures in Dallas, Tx., for a fast flip, you might want to think about partnering with a seasoned investor who can show you the ropes, or work with a company like We Buy Houses Cash Dallas, who can help guide you throughout the entire process.
Get Your Financing In Order
Depending on the home, obtaining traditional financing might require you to jump a few additional hurdles. The banks are investing in you, and if the home appraises for a low amount, you might not be able to get the loan you’re after. Many foreclosure buyers deal in cash. We use private lenders to purchase property from banks and credit unions. We can get the funds faster, usually in one phone call and that makes for happier banks.
A cash offer can speed up the process by avoiding additional red tape from another bank. Many foreclosure investors deal only in cash, making the process highly competitive. Again, if you work the smaller regional and local banks and credit unions, you should not have a big problem. As you learn how to buy foreclosures in Dallas, Tx., from banks, you will discover cash is still king.
Making Your Offer
Know your limits. Sure, you might pay a bit more if you are trying to buy a home you want to live in for the next 50 years. But if you are only looking to flip, you will not want to pay a dime more than you have to. Depending on the market area you are working in, some markets will allow for more add on to the property when some markets will not. You need to know how to buy foreclosures in Dallas, Tx., and else where for that matter.
You must have predetermined price guidelines you stick to. You are better off losing a deal than losing money. The banks will often ask you to submit your “highest & best” offer.
In essence, this is the bank, asking for all interested parties to submit their maximum bid. If you’ve ever bought anything on eBay, you’ll know those last few seconds, trying to get the highest price can be invigorating and stressful! This why we like working directly with the smaller banks and contacting those banks ourselves. We know how to buy foreclosures in Dallas, Tx.
Don’t get caught up trying to outbid what you think your competitors will offer. Stick to your price, and walk away if you have to.
At We Buy Houses Cash Dallas, our mission is to help you navigate the world of foreclosures and help you find a great deal. If you have any questions about the process, or if you would like to receive early access to deals, click here to visit our website and fill out this short form, or give our office a call now! (214) 723-1304.
