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Foreclosure auctions – A cost effective way to buy homes

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By : John Smith    99 or more times read
Foreclosure auctions have different meanings for home owners and prospective home buyers. For homeowners, foreclosure is a scary process which ceases their right on the property. For homebuyers, it is a unique opportunity to own home at a comparatively lower price. The number of foreclosures is now at all time high in US due to the volatile situation created by global economic recession and squeezed credit. Estimates show that, near bout 7 million houses are on the verge of foreclosure till September 2009. Foreclosure status in US in 2005 was 1.25 million only. The statistics shows the phenomenal growth of foreclosure process in the US due to increased inability to maintain regularity in timely repayment of home equity loans.

How foreclosure process is initiated?

The foreclosure process can be initiated by the lender at court of law or the owner can do it himself through power of sales. If it is a legal proceeding, the lender is not bound to intimate the borrower regarding the process. He can approach the court directly. However, before taking a final call, the court summons all parties having interest in the property. The foreclosure process generally takes 3-14 months depending upon the redemption period of the home equity loans. Once orders related to foreclosure are passed by the court, auction notice is publicized in local newspapers once in a week for four weeks. All information related to the auction is given in the display.

The homeowner can sell the property through power of sale without judicial intervention. Here, the homeowner takes all the pains to sell the property on his own. In power of sales, the home owner has a better scope to safe guard his interests.

Advantages of buying properties from foreclosure auctions

These properties are ideal investment options for prospective home buyers and investors. Studies have revealed that they cost up to 36% cheaper compared to fresh properties. They are generally free from litigations and pending dues. The main objective of the foreclosure process is the safe return of the lender’s money. Hence, they cost cheaper. As the properties lay unoccupied, the buyer can take immediate possession.

Where to get information related to these properties

All information related to foreclosure auctions can be availed through local newspapers and real estate websites. Along with, real estate websites also offer valuable resources on the pros and cons of buying these properties.
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