Archive for the ‘Bid’ Category

Things To Consider When Buying Foreclosures

Wednesday, June 23rd, 2010

is a popular subject of discussion these days. There are tales of huge savings and great deals. Did you know that there is more than one kind of foreclosure? For example, there are REO foreclosures and there are foreclosure sales. Here are things to consider about them.

Foreclosure auctions

When a home goes into foreclosure, the owner has defaulted on the mortgage. The lender will have a . You will need to attend the auction. If you want the property, you will need to bid on it. In most cases, the minimum bid will have to be as much as the loan balance. It will need to include any fees. It may need to include taxes also. The lender does not wish to lose money on the sale.

You may have to pay cash for the home, also. If you are top bidder, you will get the property, as is. This means in whatever current condition it is in. There may be people still living in the house. There may liens on the property. This type of purchase tends to favor the investor over the home buyer.

These types of auctions are commonly unsuccessful. The lender will have to take possession of the property. That leads to the next type of foreclosure.

REO

REO stands for real estate owned. The property has been foreclosed on and the lender owns it. It did not sell in a foreclosure auction. There is no reason to consider that there is anything wrong with an REO foreclosure. It may be that the owner could no longer afford the payments.

The lender does not really want to own the house. They cannot make money, as long as it sits vacant. Buying the property will not be a risky situation. You are buying directly from the seller. The seller owns the property free and clear. You will not have to pay any back taxes. There will be no property liens to be concerned with. The house will be vacant. There will be no one to evict. The seller will want to sell the house as soon as possible.

You can get substantial savings on a purchase like this. It may be as much as twenty percent off the market value. You may also receive low interest mortgage rates. Your down payment may not be very large.

In Closing

Buying foreclosures can be a profitable and enjoyable experience. It may vary from house to house. Real estate investors may do well at a foreclosure auction. Consumers may do well with an REO foreclosure deal. You can get a good deal, if you do your homework.

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