Blog by: Rosa Javier
As someone who lives and breathes real estate, I do not shy away from learning any aspect of the industry. I immerse myself not only in all the ways to win but also in all the ways to lose. Online, you will find countless people making real estate investing seem like such an "easy" endeavor to enter and start investing in. They do not really ever speak about the risks; in fact, they often gloss over them. However, today I want to break some hearts and dreams about this topic so that you are much better prepared if you'd like to enter this industry in any capacity. No matter what anyone tells you, real estate is not easy. It's a way of life, and you have to decide which way you will go. There are high "POSSIBLE" rewards, as well as very likely many losses. Today, I would love to dive into Sheriff's Sales.
Let's provide a quick definition: A Sheriff Sale is a legal process that may be initiated on real estate to satisfy a debt.
Sheriff Sales
Sheriff's sales/foreclosures that are being sold by the county courthouse tend to be a topic that many say can be a money maker. At surface level, they are much cheaper than similar homes being sold at market value. One thing that I always want my clients to take away from working with me is asking themselves, why? Why is it cheaper? What is the actual price? Many times, what you will not pay in one way, you will pay in others, whether it is with money, time, or stress.
Here's a list on what to keep in mind when it comes to Sheriff Sales:
Taxes
Many of these homes are being sold through the county because their owners owe thousands upon thousands in taxes.
Liens
Other than taxes, what other debts does the home hold? Mechanics liens? Mortgages? Other debts?
Repairs/Mold/Health Hazards
You will not be able to see the inside of the home until you buy the property. You will not be allowed to bring a professional inspector either until after purchase.
Cash
You will need cash in hand or a cashier's check to pay the down payment at the auction.
Competition
Many of the people who go to these Sheriff Sales are professionals. They have a team of different title companies that can search for liens/debts on the property, they have lawyers, real estate agents, or they themselves have their licenses, and they have a team of contractors that are ready to flip the homes at a moment's notice. They have a team that they already trust to start working as fast as the investor needs it.
What To Do If You Are Going To Buy A Home At A Sheriff Sale
Go online to the county's website to see the list of homes for sale in advance
Google the homes to see which ones pique your interest the most
Go to physically see the outside of the homes that you liked the most after doing some research
Start networking with title companies, contractors, and people in the industry to have someone to call or work with when you need them.
Choose the houses that you are willing to pay the title company for a search, and see which one makes the most financial sense to buy.
Make a budget before you go of how much money you want to spend and how much you want to make from this deal.
Be organized, have a team ready, and most importantly, BE PREPARED.
Money = Down payment, owed taxes, liens, Sheriff's Fee, Transfer Tax. Within 30 days, will you have the rest of the money to pay the total amount of the sale?
Research
Documents
You cannot go into real estate investing or buying/selling without being prepared. This industry will eat you alive if you let it. Allow professionals who are vetted by you and those whom you trust to guide you in the right direction. And remember, nothing is as easy as people make it look or as it seems.
Rosa Javier
Email: rosajaviersales@gmail.com
Please read the other blogs to get more education about real estate. See on the next blog!
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