Foreclosure Laws Differ Depending Where You Live- By: Karim El Sheikh
Depending on the state or jurisdiction in which you currently reside, the process of foreclosure will be different. Obviously, there’s no way we can go over the entirety of foreclosure laws for all 50 states over the course of one article, but what we can do is give you the resources to help you figure out what foreclosure laws are like in your area and how they are likely to affect the process of buying a foreclosed house in your state.
Mainly, the foreclosure law that will affect buyers the most is the ones determining how long it takes for the bank to finalize foreclosure and get the house up on the market. For obvious reasons, you’ll need to look this up individually in your area. A good place to start when it comes to getting information on foreclosure laws is with your local bank or lending institution. They’re the ones that have to deal with foreclosure all the time, so their understanding of foreclosure law will be very comprehensive and they will likely be all too happy to walk you through the finer points of the process. They’re interested in selling their foreclosed properties, after all, and if informing a client about the finer points of foreclosure law is what it takes, then the bank or lending institution will likely be up for the job.
Another differentiation in foreclosure law also applies to auctions. Depending on where you live, a foreclosure auction may be simply called a foreclosure auction or a sheriff’s auction. In some states, a sheriff has to be present when property is sold, so in these places the law mandates that the name be different. Essentially, though, both are the same in practice – a place where you can purchase property insanely cheaply. Many banks and lending institutions get stuck with properties on their hands that they just can’t sell, and opt to take a steep cut in the price of the house just to not have to worry about it sitting on their hands for a long period of time. Since banks have to pay property taxes on foreclosed properties, hanging on to houses for more than a month is often not cost effective, and can cause the bank to lose thousands of dollars.
If a bank or a lending institution has a property that just won’t sell, it’s not unusual for it to end up at auction. Here, buyers can get houses that often sell for less than a fourth of their original market value. However, the houses often do need repairs, and foreclosure laws in many places prohibit potential buyers from getting a housing inspection done on the property before purchasing. In this arrangement, the buyer agrees to take on the risks inherent with the property in return for the extremely low price the bank is willing to sell at. The good news is that even with repairs made to the houses, it’s not unusual for a buyer to still come out on top with this arrangement – if you buy for less than a fourth of market value, you have a lot of money to work with!
Another great resource when it comes to learning about and dealing with foreclosure law is the Internet. There are hundreds of sites that are dedicated to explaining foreclosure law for anybody who’s interested, whether it’s somebody who is undergoing foreclosure or somebody who is looking to buy a foreclosed property. Finding information about foreclosure law isn’t that difficult – so don’t let it intimidate you out of buying a foreclosed home!
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