The Variety of Foreclosed Homes for Sale- By: John Cutts
There are different kinds of foreclosed homes for sale. They each have their own set of advantages and drawbacks. Your choices can be better guided by getting to know these properties more.
Bank Owned Foreclosures
Also known as real estate owned properties or REOs are those homes that became the ownership of the bank after a failing to sell at an auction. Banks do not want to hold on to these properties for a long time as it eats up on their resources so they offer it to the market at a discounted price and with incentives and perks. Many investors prefer REO properties as they are usually risk-free. These types of foreclosed homes for sale come to the market pretty much like a fresh home because the bank has already extinguished the unpaid mortgage of the previous owner.
Government Foreclosed Homes
Government foreclosure homes are foreclosed homes that were purchased through a loan secured by a government office like the Veterans Affairs Administration or the Housing and Urban Development. Foreclosure of these homes is undertaken by the agency that secured the loan and the proceeds of its sale go back to the lending institution that actually provided the loan.
Government agencies usually appoint a real estate company to get these properties listed on foreclosure listings. The real estate company will also be the contact person for the property. Bids for government foreclosures are submitted by the agent to the government agency. The agency then reviews the bid along with several others and picks the highest bid. The winning bidder would have to pay for the home in a short period of time. If payment is not made the government will forfeit any deposits or earnest money paid prior to the auction and may enforce a penalty for failure to make payment on the settlement date.
Another type of foreclosed homes for sale is fixer uppers. These are the cheapest type of foreclosure because of their run-down quality. Repair costs for these types of homes can be quite high. These properties are ideal for people with the time and the inclination to fix a run-down home and bring it back to life.
Since these homes are quite cheap, they can be very profitable when resold. Many investors find that handsome profits can be made especially if the fixer upper does not really require major repairs and can be thrown back to the market in a short period of time. These homes are also ideal for concept projects that usually generate a lot of buyer interest.
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John Cutts has been educated in the finer points of the foreclosure market over 5 years.