|
Foreclosure begins when a property owner defaults on the
mortgage of a property, mainly due to financial difficulties or
the inability to keep up with the mortgage payments for some
reason or another. In the event that a property succumbs to a
foreclosure, it's most likely that the property has not been
maintained as it should have been.
This means that perhaps the roof is in dire need of repair, a
damaged foundation or the landscaping has been severely
neglected, or a number of other maintenance or repair issues
that may be costly. Some foreclosure homes may only need a fair
amount of TLC. The amount of repairs needed or required for the
foreclosure property may greatly reflect on the asking price. A
major fixer upper may be offered at a lower than normal price,
whereas a property that is in fair condition may go for a price
just the below the market value.
When a mortgage lending institution decides to foreclose on a
property, they will file a notice of default that will become a
public record for all buyers who are interested in locating
foreclosed properties for purchase. There are many places buyers
can look to find foreclosed properties such as: various web
sites on the Internet, real estate agents or brokers and real
estate magazines.
Once the buyer locates a foreclosed property they are interested
in, the buyer can assess the public records and check for any
liens on the property. Most liens that are placed on foreclosed
properties are for unpaid taxes. Interested buyers should also
check the values of the neighboring properties before entering
into a contract, to make sure they would be getting a fair
market value.
Novice buyers may be interested in checking out bank owned
foreclosure properties. These bank owned foreclosure properties
may prove to be at lower risks to the novice buyer. With bank
owned foreclosure properties, there are usually no tenants to
evict, no liens against the property and no past due taxes.
Some lending institutions may be eager to sell their foreclosed
properties and may offer to finance the foreclosed property to
the buyer at a low market rate or with a small down payment. If
the lending institution has already done an appraisal, the
interested buyer may not have to pay an additional appraisal
fee. Most lending institutions that are eager to sell a
foreclosed property may also include title insurance that
generally removes most of the risks that come with buying
properties early on in the foreclosure process.
The more experienced buyer may decide to find a pre-foreclosure
property owner about to go into default and offer to buy the
property for a portion of the difference between the property
equity and the market value. This may be an acceptable offer to
a property owner who doesn't want to end up losing all of the
equity that has been invested in the property. Some
pre-foreclosure property owners may offer bargains to a
persistent buyer. This is mostly because at this stage, credit
collection agencies are constantly hounding the property owners,
who would in turn want to resolve these issues to avoid any
further harassment.
Buyers may sometimes find that contacting the owner of a
pre-foreclosed property can be difficult. Usually by this time,
the property owner may not have any electricity or a telephone.
Sometimes these pre-foreclosed property owners may also be
difficult to deal with directly, due to a drug or alcohol
addiction that put them in their situation in the first place.
Some owners may also be hostile to the buyer or unpleasant to
deal with because they are bitter and frightened about losing
their home and perhaps they have no other place to go. Some of
these owners may even see the buyers of their foreclosed
properties as their mortal enemy and may do some extra damage to
the foreclosed property before evacuating the premises.
Many foreclosed properties are normally sold at prices close to
the assessed value. Depending on what city or neighborhood the
buyer is interested in, what the neighboring property values
are, how long it has been on the market and what amount of work
needs to be done to the foreclosed property will greatly reflect
on the asking price.
About the author:
Gregg Hall is a business consultant and author for many online
and offline businesses and lives in Navarre Florida with his 16
year old son. See house
foreclosures at http://www.houseandpropertyforeclosures.com
|
