| Foreclosures happen when a property owner, who | | | | - Go for an inspection and try to locate the faults |
| has taken out a mortgage to buy the property, is | | | | - Weigh them against different parameters |
| unable to consistently make the payments on time. In | | | | - Compare them with other kinds of properties on sale |
| such situations the lender takes over the property. | | | | in the area |
| Understanding the Foreclosure Process | | | | - Know details about the property - the owner, |
| A pre-foreclosure is the first stage. It is one which has | | | | whether there are any unpaid taxes, debts etc. |
| not yet gone into the sole control of the lender. Here | | | | - Enquire about the minimum bid you can place on the |
| you can buy directly from the lender and enjoy a good | | | | same |
| discount, a less down payment, a less rigid sales | | | | - See whether it meets your budget |
| agreement. | | | | - Make the bid if the foreclosed property is being sold |
| A foreclosure bought at an auction is the second | | | | at an auction. Otherwise, after the foreclosure sale, |
| stage. Here you can save the most with regards to | | | | submit your sealed bid to the lender. |
| the market rate of the house. | | | | How are payments made when purchasing foreclosed |
| An REO or 'real estate owned' foreclosure has a | | | | property? |
| clear title with all the taxes seemingly being paid by the | | | | You can make payments for such properties in any of |
| lender. The risk is less and the property might have | | | | the following ways: |
| been repaired by the lender! Also called a | | | | - Payment during the auction itself |
| post-foreclosure, an REO comes into being when a | | | | - In full |
| foreclosure isn't purchased by any one. | | | | - In cash and through cashiers check |
| How to find Foreclosed Properties? | | | | Advantages |
| Foreclosed properties are not found in regular property | | | | There are many advantages in buying foreclosed |
| listings. Here is where you need to look for such | | | | property. Here is a look at what you gain as a buyer:a) |
| properties: | | | | You can buy the house at an amount less that its |
| - Sheriff's Sales, Auction Sales, Foreclosure Notices in | | | | market value.b) It is the best option if you have a good |
| newspapers | | | | credit rating and enough money to make a down |
| - The MLS - Multi Listing service for foreclosures that | | | | paymentc) You can buy it through a normal mortgage |
| are not being sold at an auction | | | | financed) As most of the payment is in cash, very |
| - The RIS or Record Information Services | | | | few people will bid/show interest to buy a foreclosed |
| - The internet where different sites provide information | | | | property through auctione) In REO stage, the property |
| on foreclosed properties in different locations. Some of | | | | is vacant, the titles are clear, inspections are allowed |
| the more well-known sites are foreclosurenet.net, and | | | | Disadvantages |
| so on. | | | | Buying foreclosed properties can also have certain |
| From whom can you purchase a foreclosed property? | | | | drawbacks. Here is a look at what these are: |
| The location of the property is vital in this case as it is | | | | 1. Complex, risky procedure |
| auctioned at the Court House in the County of its | | | | 2. Owner or the renter might still be residing in the |
| location in the Trustee Sale. The U.S. Department of | | | | property |
| Housing and Urban Development also sells foreclosed | | | | 3. Higher loan pay-offs |
| properties through an auction. However, not always is | | | | 4. Auctions don't allow buyer inspection; are uncertain |
| a foreclosed property sold at an auction! | | | | 5. No title insurance |
| How to purchase a foreclosed property? | | | | 6. Costs are higher though apparently seemed less |
| The purchase of foreclosed properties happens in a | | | | 7. Buyer might have to clear previous owners' unpaid |
| different way. here is a look at the typical activities | | | | debts and taxes |
| involved in purchasing a foreclosed property: | | | | 8. Major part of the payment in cash |
| - Search foreclosed properties through different media | | | | 9. No discounts on REO properties |
| - Take the help of realtors in the same; convey your | | | | Summary: |
| intentions to buy | | | | Purchasing properties sold at a foreclosure auction is a |
| - Gather information about such properties; go to the | | | | great purchasing opportunity. Look into the pros and |
| proceedings related to buying the same. Browse | | | | cons of buying foreclosed property before venturing |
| official government, county and state department sites. | | | | into it. |
| - Shortlist the ones you would want to take a look at | | | | |