By Jeanette Joy Fisher

Although the repossession market seemed dried up last year, houses are beginning to appear on foreclosed lists again. Lender Rob Kramarz with Nationwide Mortgage (http://www.sweetloan.info) says that this may be the beginning of another real estate investor boom.

If you're new to real estate investing, here are the basics about repossessions.

• Some real estate agents try to discourage you from repos and switch you to multiple listed homes. Do not listen to negative remarks about how hard it is to find a good deal. Find another agent.

• Paying a listing service to mail you lists of repossessed properties is a waste of money. Most often, by the time you get these lists, the houses are already sold. Many websites listing foreclosures thrive on the web with real lists. (http://www.money4investors.com)

Look for great bargain properties for sale by HUD, VA, Freddie Mac, Fannie Mae, and Bank-REOs (acronym for real estate owned).

HUD Repos

In most areas, new HUD listings post online late Thursday night or Friday morning. New "Daily's," homes previously sold which fell out of escrow, post Saturday morning. Properties not sold during the bid time stay listed as daily's. Bids, due by the following Tuesday at midnight, must be submitted by a real estate agent who has completed HUD registration. Don't waste your time using an agent who is not familiar with selling HUD homes. Any mistake causes the bid to be rejected. Don't use an agent who says you must bid way over minimum bid. Find an agent specializing in HUD homes who wants to work with you on your terms. Many bargain HUD homes do sell for far more than the minimum bid. Hold out for the one property which doesn't get overbid.

Rely on your gut instinct and don't let your real estate agent unduly influence you. It is not a difficult process for your agent to make a computer bid. You need an agent willing to make a few bids to get a successful bid. This is like winning a lottery, with the odds in your favor.

Bids must have a lender's loan commitment statement. Lenders unfamiliar with HUD requirements also waste your time. Any mistake causes you to lose the purchase. Not all lenders understand HUD's bid, finance, and purchase process.

When placing a HUD bid, raise your offering bid to cover some of your closing costs. This means you get HUD to pay your closing costs and save out-of-pocket expenses. Also, the higher sales price impacts the market comparable sales in your favor for resale later. Your purchase price influences the values of the market area. Keeping prices higher for active sales during your renovation time protects your investment potential.

VA Repos

Usually cleaner than HUD repos, homes owned by the Veterans Administration are also offered on a bidding system through real estate agents. The VA partially fixes up their repossessed homes. The VA sometimes offers vendee (seller) financing with few processing costs, low interest, and no prepayment penalty. You do not have to be a Veteran to buy these easy to qualify for homes.

Other Governtment-Owned Properties

Less known government agencies such as Fannie Mae, Freddie Mac, FDIC, SBA, the IRS, and GSA list repossessed properties on their individual web sites. These properties, rarer than HUD and VA, usually get cleaned and repaired before listing with real estate agencies with sale prices closer to market value.

Bank REOs

Banks often offer their real estate owned (REO) homes at bargain prices. Depending on the bank's resale policy, conditions of the property, and available financing, REO opportunities vary widely. Several banks lend on their repos while other banks just want out. Great financing becomes possible through the banks who offer in-house terms. Ask for no points, minimal loan costs, and no prepayment penalties. Check with your local lending institutions and find out how they market their repossessions. Many of these bankers will give you their web page listing available property. Make friends with real estate agents who specialize in listing bank-owned repossessions so they will notify you of a new listing immediately.

More real estate investing information for beginners.

Copyright © 2006 Jeanette J. Fisher