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Knowing the Truth About Foreclosures



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By : Fredrica Smith    99 or more times read
Amidst the depressing news about sinking real estate markets in most states, there is a noticeable number of home owners who have been enforced to file for bankruptcy and have their properties foreclosed. On the other hand, one investor’s loss can be another’s gain. If you have been contemplating to purchase a home, you can look into the category of foreclosed homes, which are often immediately dismissed as second-rate investment. On the other hand, such presumption can be justified as there are some truths concerning the foreclosure process that not all home buyers know about and lenders usually disclose of.

First of all, buying a foreclosure can actually be advantageous. There are many benefits for you as the buyer. Here are some aspects other investors overlook:

  • Foreclosed homes are less inexpensive than properties in other mainstream real estate markets due to many factors. For one, lenders would naturally want to recover their financial losses due to the outstanding debt balances. They would then want to increase the saleability of the home so as to attract buyer offers as soon and many as possible. The price ranges more or less $30,000 to $250,000 depending on the location, year of construction and other factors of the house.

  • In many cases, the lenders take care of the liens or judgments attached to the home. This then saves you a great deal of time and effort for a clean title search which can be costly and painstaking. Also, when the taxes are already paid for, the property does not have security interest attachments any longer.

  • Some home buyers look down on such homes as they assume they are of less quality. The main reason these homes are on the market or public auctions is due to the delinquency of the previous home owner regarding his mortgage payments. Most of these homes are actually in good condition prior to putting them on the market once again. There are lenders and/or home owners who fix some minor damages in the house before it is put on sale or auction. And in case there are unnoticed repairs, there are lenders who give funding assistance for another inspection and sometimes even for minimal reconstructions of fixtures, electrical wiring and plumbing. In addition, there are some home owners that throw in appliances along with the sale of the home.

  • Purchasing such house can improve your credit score. Investing into such property can translate you being a good judge of a conquerable risk. Thus, you will appear as a good investor.

    Another truth about this process is that banks cannot actually proceed without court assistance. This condition will then affect the comfortableness or difficulty of acquiring a foreclosed home. Most banks will need to obtain a ruling form the court to execute some steps. Case in point is the eviction process. The bank has to acquire an order from the court and then an officer or sheriff would supervise the process. But that is not always the case. There are some states that empower the lender to skip the judicial process. Some banks use the clause “power of sale” in the mortgage document. They can then enforce the property to be put on the market given that the home owner has not complied with the agreed payment terms of the outstanding balance.

    Furthermore, although banks are the main market source of foreclosed homes, there are other venues to get hold of such properties. Lending agencies and private real estate listings also promote these properties. And as the market sources are varied, so are their methodologies in advertising the property. You can look into newspapers, online websites, direct office selling or multiple listing services.

    Being somehow familiarized with some then little-known facts about foreclosures, you can be well guided in deciding whether you would want to pursue entering this type of negotiation. The main point in all of these is that you can easily adjust your financial capacity and bargaining skills apt for this real estate option.
  • The Real estate market can be an enjoyable, satisfying and lucrative experience for you. Whether you are a homeowner, a buyer, a landlord or simply a real estate enthusiast, get to know more about the latest in the real estate market now. Read more about it here: Foreclosed Houses for Sale in Southern Phoenix Metro AZ, Tolleson AZ Foreclosed Real Estate and Foreclosed Homes in Arizona City AZ.

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