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Foreclosed Homes Can Be A Great Buy - Here's What They're Not Telling You



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By : Karim El Sheikh    99 or more times read
Whenever a bank forecloses on a property, it is bad news for the bank and for the owner of the mortgage. That is a loss on both sides. So here is what they are not telling you about foreclosure—and what you can do when you see listings for foreclosed homes for sale. Take advantage of the foreclosure process and its results so you can buy and live in your dream home.

The first thing banks do not tell you is that they want to get rid of the property. Upkeep, maintenance plus the amount unpaid all goes back to the bank. This is why they often sell the house to a servicer as soon as they can—to make up for the loss. This is where you come in. Banks are willing to sell homes at a much lower rate than before and you can take advantage of that. In this case, the value of foreclosed homes is less for the bank and more for you.

This is why banks only foreclose after they go through loss-mitigation techniques such as reducing payments or even going through periods of forbearance to allow the mortgage holder to catch up on payments. However, most people do not approach their banks when the foreclosure notice threatens, too used to nightmare scenarios where the bank simply takes without dealing.

Finding a short sale home in the foreclosure market can be easy. Many auctions and real estate listings carry foreclosed properties as a way to make up for the loss. When you step in to buy a home in the short sale listings, you have the potential of finding a home worth at least twice its market price up for grabs for a price you can easily afford. Look for deals that allow you to take a mortgage through the same bank with a smaller payment and interest (this is where good credit can work well for you) or direct sales that allow you to put a larger down payment that you can afford.

Make it simpler by looking for homes that have been rehabbed and remodeled for sale, and have them checked and inspected before you even sign anything. You have to be smart so you can get the best deal you can afford. That way you avoid the pitfalls of buying a short sale house that is in dire straits or needs extreme repairs to function. Also check the neighborhoods where you will be buying for the things you need, such as good schools or ease of commute to your place of work.

Buying a foreclosed home is not stealing or the work of the hopeless. It is a legitimate and even money-savvy way to segue into home ownership. Playing it smart and knowing your foreclosed properties can help you buy a home you love in a neighborhood you like without breaking your back over impossible mortgages or payments. Finding a good home can be a lot of hard work, but a little sweat and some savvy can get you a home you will love living in at less than its asking price.
Foreclosure.com is the top resource for all real estate investors and homebuyers. Search all foreclosure homes for sale in your area.

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