Austin's real estate market is slowing from its record pace the last few years. However, high interest rates mean that buying property remains expensive.
You can maximize the return on your investment by buying foreclosures. Foreclosure happens when a property owner can't make their mortgage payments and the lender repossesses the property.
Learn more about why buying a distressed property could be a good option and how to find the right opportunities in Austin.
Pros and Cons of Buying Foreclosures in Austin
The main advantage of buying a foreclosure is that you're likely to pay less than for a similar property in the same area. The seller wants to dispose of the property as quickly as possible. You can fix and flip a property for a higher profit.
The biggest disadvantage of foreclosures is that they're sold "as-is." You may need to address significant repairs and maintenance issues.
The process to buy a foreclosure often takes longer than for a traditional sale. You may need to resolve legal issues like unpaid taxes or liens. You need to verify that no occupants remain in the home.
You'll also usually need to pay cash for foreclosed real estate. Private lenders are reluctant to finance a foreclosed property. Several government options are available for qualified buyers, though.
Finding Distressed Properties for Sale
You can find foreclosures for sale in several ways. A realtor with experience in Austin foreclosures can find opportunities for you.
You can search websites like:
- U.S. Department of Housing and Urban Development (HUD) Homes for Sale
- Fannie Mae HomePath
- Freddie Mac HomeSteps
Foreclosure sales in Austin must be registered with Travis County. The properties will be listed on the official county auction site around 15 days before they will be offered for sale.
Buying Property in Foreclosure
The two main ways to buy a distressed property are at an auction or directly from the lender. The auction process is faster, but you'll need cash. Bank-owned properties can be a lengthier process.
Auction Sales
Auctions in Austin are online. You'll need to register with the county tax office and RealAuction, the property auction site.
Before you can bid, you need to make a deposit of 5% of your offer. You'll need to pay the remainder of your bid on the day of the sale.
Real Estate Owned Property
If a property doesn't sell at auction, the lender takes ownership of it. The process to buy a real estate owned (REO) property can be lengthy. Banks have an operations manual to follow and various levels of authority that must sign off on the deal.
An experienced real estate agent can help you navigate this process.
Take Advantage of Opportunities in the Austin Foreclosure Market
Foreclosures can be a good opportunity for a real estate investor. You can purchase the property below the market rate and make a profit more easily when you sell or rent it.
The realty team at PMI Austin Experts can help you take advantage of foreclosure opportunities in Austin. Our agents understand the local real estate market. We focus on quality, value, and results so you can achieve your real estate goals.
Schedule a consultation with PMI Austin Experts today and put our experience to work for you.
