Foreclosure is a process that banks and other lenders use to get their money back when a homeowner has defaulted on their loan. This process is put in motion when the borrower defaults on the loan. After the borrower has missed a couple of payments the lender will file a public default notice. If you want to keep your home, you will have to act fast to keep from losing it to a forced sale. Your home will then be listed as a foreclosure home for sale.
Once the borrower has been issued the Notice of default, he/she has three months in which to rescue the default. The payments owed have to be paid in full plus the interest that has accrued. If the time expires without the borrower making good on the defaulted payments the property goes into foreclosure, and will be listed as a foreclosure home for sale.
Cashing in on a foreclosure home for sale can be a little risky. It is always good to hire an attorney and an agent that specializes in foreclosure properties when acquiring a foreclosure home for sale. It is possible to purchase a home that is in foreclosure for as much as a 30 percent discount, because the bank wants to recoup as much of the amount owed as possible.
Finding a qualified agent that is experienced in handling foreclosure properties is very important, because the original homeowner (seller) may be leery of being scammed by an unrepresented buyer. If you are interested in locating a foreclosure home for sale in your area, you may call the lender real estate owned (REO) properties department at your local bank and ask for a list of foreclosed properties. When you contact an REO you may or may not be able to negotiate an estimate. The rules pertaining to price negotiation varies from bank to bank, and some banks will stick with the broker’s estimate.
When you find a foreclosure home for sale that you are interested in, never buy it sight unseen. Take a look at the property. Some homes may be in good shape, and others may be in a bad state of disrepair, so it is always better to inspect the home inside and out to know just what shape the property is in. You also need to know if you are truly getting a bargain for the price of this foreclosure home for sale. Your agent should check some other homes in the area that are in foreclosure to see if their asking price is similar to the price of this particular foreclosure home for sale. If you are still interested you can then proceed to negotiate for the foreclosure home for sale.
Many first time home buyers want to buy a home for less than market price, so they start searching for properties from foreclosure home listings. There is a misconception due to TV ads that you can buy foreclosure homes for almost nothing, which isn’t true; however buying a foreclosure home can be affordable. It is possible to get a zero down payment through some lenders; they offer zero down to sell the property faster, to recoup their investment.
Should you be interested in buying a foreclosure home, foreclosure home listings are available at any bank’s REO (real estate owned) department. To be one of the first the find a new property that has just been added to the foreclosure home listings, your best option is to contact a real estate agent that specializes in foreclosure properties. A real estate list agent is the first to receive foreclosure home listings from the REO department. You can drive around looking for foreclosure properties, and you can check the classified ads in the paper, but hundreds of people are probably reading that same ad; therefore, an agent will be your best bet at getting a good foreclosure home. An agent will send foreclosure home listings to your email, if you ask them to; this is good because you will stay up to date with the newest entries.
When you find a home that interests you on the foreclosure home listings, you will need to ride out to the property to take a look at it. You will have to decide if the home will meet your needs. When examining the home, you need to have a notebook, pen, camera, and tape measure with you. You will need to note the condition of the home, and if there is any structural damage. Taking photos of the house and the surroundings with help you to recall each house you visit, so you can make an informed choice.
If you are a veteran you may be able to get a VA loan with zero money down. FHA also offers loans at no money down. By not paying a down payment it makes it easier for you to afford the home, but the interest rate will be from 0.5 to 1.0 percent higher than a loan where you put up a down payment. Over the term of the loan, that small interest rate increase will add to the overall cost of the home, but it may be the best option for some buyers.
Foreclosure home listings include strict, as well as judicial foreclosures. Whether you want to buy the home from the bank or purchase one at auction, staying on top of the foreclosure home market is the best way to find the house you have always wanted.
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