So you’ve heard a lot about “buying a foreclosure” but the whole subject is fairly new to you. Luckily, we’ve taken the time to explain the ins and out of the foreclosure buying process. But what is a foreclosure exactly? A foreclosure is the repossession of a mortgaged property due to the failure of the mortgagor to make the payments. Essentially- it’s the lender taking back the home because the homeowners cannot afford it.
So why should you buy a foreclosed home? The major reason is that foreclosed homes are significantly cheaper than new construction, resale properties, or homes that are for-sale-by owner. In addition to the phenomenal prices, many of these homes will have been left empty for a significant time, thus making move in a much more expedited process. And for those that love the fixer-upper, foreclosures present a great opportunity to redecorate a house and really make it their own. Foreclosures make a great fit for plenty of buyers, especially first time home-owners who have the motivation to fix the place up. Not to mention, many first time buyers are searching in the lower end of the real estate price range because they want a nice house for a great price.
So how do you buy a foreclosure? You should know that buying a foreclosure is not like your typical real estate transaction. Oftentimes, there is only one Realtor involved, which means there is little negotiating. And any damages to the property are your responsibility to fix. Still interested? Great! But before you start doing internet searches and driving around looking for those “foreclosed” signs, you’re going to need to take care of a couple of things.
One of the most important steps will be finding an agent that works with banks that own the foreclosed properties. You will also need to get preapproved by a lender for a mortgage in the same time frame. Until you accomplish these tasks, you need to put your home search on hold.
You’ll also need to do some in-depth research on the homes you are considering and have a good understanding of how long those homes take to sell, as well as what those homes are selling for. In the foreclosure business, a small, modest house may sell within hours while a luxurious mansion with a range of amenities may sit on the market for months without anyone looking at it (and often vice-versa). The point is, the foreclosure market is very difficult to predict, and if you have a home you are interested in, it’s best to start the process of buying it as soon as possible. The best way to be ready to buy the perfect foreclosure is to be prepared for any opportunity. So if you’re interested in getting a great home at a rock-bottom price, get your preapproval letter and talk to a trusted broker, like Joe Hernandez, today! By Andrew Hill http://newhomes.move.com/