You Do Not Need to be an Expert When Buying Foreclosure Houses- By: John Cutts
As one of the bigger segments of the real property industry, knowledge about the basics of buying foreclosure houses is well known. Foreclosure happens when owners fail to pay their mortgage for three straight months. The lender, usually a bank, who completed the foreclosure process on a property will place the home back in the market but at a significantly reduced price. There are even times when the bank would be willing to offer a financing scheme for candidates with a good credit history.
What Are the Types of Foreclosures?
If you are buying foreclosure houses, you should be able to see the difference between government foreclosures and bank foreclosures. Bank foreclosed properties reach the market either through a public auction or a real estate broker of agent. Experts recommend bank foreclosures for new buyers as banks offer value added services to the home they are selling, including home appraisal, eviction of previous occupants and minor repairs.
Bank foreclosures or real estate owned homes as they are also known are priced according to the remaining balance of the loan. This is the value which the bank would like to recover. A good thing about this type of foreclosure is that the bank will also take care of unpaid taxes or liens so that they would no longer have to transfer to the new owners.
Should you want to try buying foreclosure houses offered by the government, you have two options. Some foreclosures have been funded by the Housing and Urban Development through their mortgage finance entities Freddie Mac and Fannie Mae. These homes have been foreclosed after the buyer reneges on their mortgage payments.
Tax foreclosures are another form of government foreclosure and these are properties where owners failed to pay the taxes on. Government foreclosures are priced even lower than bank foreclosures but they would not have the added value offered by bank foreclosures.
Due Diligence and Home Inspection
Before actually buying foreclosure houses buyers should first familiarize themselves with the inner workings of the entire foreclosure process. Perhaps the best way to do this is to subscribe to an online listings service web site. These web sites offer up to date information about foreclosed homes for sale. Some of the information and services that will be available to users include a comprehensive description of the property, the property manager's contact details, tips on how to make a wise investment in real estate and a mortgage calculator.
Do not settle for free sites as the timeliness of the information offered there may be suspect. You should consider a site that requires a subscription fee to be sure that you are getting the best and most timely information on foreclosures across the country. If you have spotted the property or properties you would want to consider ask whether it is possible to conduct a home inspection to determine the real value of the home or homes. Just remember that buying foreclosure houses is not rocket science and all you need is the right attitude and the correct set of data.
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John Cutts has been educated in the finer points of the foreclosure market over 5 years.