A buyer relies on his list of foreclosure homes not only to give him the latest and most accurate data on foreclosures but also to educate him on the business of foreclosure investing. He should be able to learn the current market trends but more importantly how to use that knowledge to his advantage.
One of the vital roles of a good list of foreclosure homes is to be able to differentiate every type of foreclosure and give all the benefits and drawbacks for each one. A new buyer should be able to identify each type of foreclosures and base his actions on this knowledge. At the minimum, he should know the following:
Government foreclosures may either be judicial or non-judicial. These distressed properties are ideal for middle- to low-income individuals and families because they are offered through government-secured financing. These homes are being offered mostly to first-time buyers who will be the owner-occupiers of the property.
These homes can still be foreclosed if the owner fails to meet their obligations or fail to pay taxes levied on the property. Listings of government foreclosed homes usually come with detailed information on the property, including the government office selling it and directions on how to purchase the home.
Bank foreclosed homes are those that have been repossessed by a bank due to mortgage default. These homes come with big discounts as banks are usually under pressure to sell them off quickly. New home buyers can benefit from buying bank foreclosures because the homes already have a title insurance and a pest certification, and they will be vacated as the banks have already handled the eviction of former occupants prior to putting the home up for sale.
Both government and bank foreclosures are initially offered to the market through home auctions. In the case of government foreclosures, the first round of public auction will only be open to owner-occupiers and if the home does not sell, a second round will of auction will be held this time for the whole market. Auctions are announced through notices released by county courthouses or through newspaper advertisements. These events are held at a public venue, usually the steps of the courthouse.
When considering a list of foreclosure homes to use in finding properties, see to it that it covers all types of distressed properties across the country.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.