Foreclosure real estate is like any other repossession in which a buyer defaults on their payments. Everyone hits hard times once in a while, but those who are unable to make their monthly mortgage payment may be forced to give up their property to the lender.
At any given time, between 4 and 5% of residential property loans turn into foreclosure homes for sale. The Mortgage Bankers Association of America prepares annual reports about the state of housing loans, and out of approximately 20 million home mortgages, one million properties are considered delinquent; subsequently turning them into a foreclosure home for sale, bank foreclosure and hud foreclosure. This presents a tremendous opportunity for potential investments. I as your Real Estate Agent can help you find foreclosure home listings and bank foreclosure listings. Foreclosure property listings will help you get started on the path to buying foreclosure real estate and investments.
There are three main types of foreclosure purchases. Any of the following methods can help you obtain a bargain on a bank foreclosure, hud foreclosure or foreclosure home sale:
Buying at Foreclosure Sale:
- A foreclosure sale is done through a court auction process where the highest bidder wins title of the property. You are allowed access to the property to inspect it prior to the auction. The property is delivered “as is,” and is free of any liens.
Buying a Pre-foreclosure:
- A pre-foreclosure occurs after a homeowner has defaulted on their property, but before it has been sold at auction. You negotiate with the owner of the property with the help of a Realtor before it is sold at the auction, and you take on the mortgage and any other outstanding debts on the property. Work with a Realtor who can help you do a Short Sale on the property and save you money.
Buying From A Lender After A Foreclosure Sale – REO (Real Estate Owned) By The Lender:
- This procedure is done by dealing with the lender that has repossessed a foreclosed property. Lenders are banks, and are not in the real estate business. Therefore, these REO properties are listed by a Real Estate Agent who represent the bank and you can obtain this list from a Realtor of you choice who has experience in working with the bank.
Advantage’s and Dis-Advantages in Buying a Pre-Foreclosure home
Sure you have advantages in buying a Pre-Foreclosure home. Save up to 40% below market value foreclosure home, adequate time to research on the foreclosure home, lesser down payment, etc. Undeniable, buying pre-foreclosure has many advantages and they are real irresistible. Anyhow, there is always a balance point in everything. It’s true that buying pre-foreclosure has a lot of advantages, but there are also disadvantages of buying pre-foreclosure.
Depending on one’s needs, only you know which buying foreclosure approach (pre-foreclosure, auction and REO) best suits you.
First and foremost, the very first disadvantage of buying pre-foreclosure is getting contact with the foreclosure homeowners. Why say so? As you have already known, foreclosure homeowners are facing negative events of his life that causing him to fall behind his mortgage payment on that moment. Foreclosure homeowners are distressed. And the outcome of this situation, foreclosure homeowners usually refuse to meet with strangers or whoever he thinks unnecessary.
To some foreclosure homeowners, this could may be help them to concentrate more on solving the problems, while to some other foreclosure homeowners, this will only isolate them from the problems. Either way, you will have works to do to get contact with them. The best way to obtain pre-foreclosure listing is through you Real Estate Agent. Email me @ NJHomeSales@Gmail.com for a list of pre-foreclosure properties.
Buying foreclosure has risk in dealing with other liens. This is the second disadvantage of buying pre-foreclosure. Who knows how many lenders the foreclosure homeowner has borrowed money from? There are cases where homeowners get home loan from 2 different lenders to buy a house and get a third lender for home improving loan.
These cases involve many legal works. You definitely can’t settle it by yourself, unless you are a lawyer and your spouse is a bank manager. So, my advise is to work with an Real Estate Agent who is familiar with the Foreclosure Market and Help you undrestand and reduce the risk of any second or third lean. With me as your Real Estate Agent I can help you obtain the Pre-Foreclosure property through the process of Short Sale.
No jokes on the legal works. It’s really frustrating dealing with them. Thus, before buying a pre-foreclosure, make sure you do a throughout research on that pre-foreclosure home including its title deed, loan information, any hidden liens, etc. Get the professional help. And this situation contributes the third disadvantage of buying a pre-foreclosure.
There are paper works to do to complete the deal and it’s time costly. Me as your Real Estate Agent can help you with all the required paperwork that is need by the bank to approve a Short Sale. This is a time consuming process. If proper paper work is not submitted to the bank, this will delay the process more further. Call Naveen Sharma for details.
However, these 3 disadvantages are actually nothing compared to the return of buying pre-foreclosure. To conclude, great bargains need hard work. You have to do research and truly understand the process of buying pre-foreclosure. I’d recommend you to work with an Real Estate Agente who can negosiate a good deal on your behalf.