The market has flattened out and many of you may be thinking, "I should purchase a foreclosure and save some money." Over the past eight years, we have seen very few houses sold at foreclosure auctions. The foreclosures that we have seen on the market have been few and far between. Furthermore, the sales that the general public has seen have been even fewer in number.
Purchasing a foreclosure is not as simple as it seems. First, a homeowner would have to miss at least one payment before a lender would put their property into foreclosure. Secondly, most lenders will wait until a homeowner is ninety days late before starting foreclosure proceedings. Finally, if the homeowner does not cure the foreclosure within ninety-five days from that point, the house will be sold at an auction.
You must attend the auction with a cashier's check for amount of the sale's price. Typically, the minimum bid on a house will be what is currently owed on the property. Prospective buyers are then free to increase the bid as little as one dollar at a time. If you are lucky enough to win the bidding, you may still have to evict the former owners (who may not yet be ready to move.) This whole process can be quite expensive and very time consuming. In other words...buyers beware!
If a house does not sell at the auction it will go back to the bank. The bank will then improve upon the property or merely put a temporary "bandage" on it. Then the bank will list it with a local real estate agent. While these types of foreclosure are not usually the best deal, you may get a good deal in certain circumstances.
The best type of foreclosure purchase for the average buyer is the pre-foreclosure. This is a house that is in foreclosure, but has not yet been auctioned off. At this point, the homeowner has run out of options and is ready to sell the property rather than give it back to the bank. Once the homeowner has gotten over the shock that they can not get their mortgage current, they will typically call a real estate agent to list their property. At this point, the sellers will be in a hurry to sell their property and they will often take what they can get in order to save their credit and walk away with a few dollars in their pocket.
Purchasing a foreclosure is not easy and you must be prepared to jump to action when one comes along. You will need to find a knowledgeable agent (one who understands your particular needs) to assist you in finding the right deal. As there are many foreclosures on the market right now, there may be opportunities to save a few dollars by purchasing a home in foreclosure.
Please let me know if you have any questions on foreclosures, purchasing or refinancing. We are here to help you in every aspect of making your dream home become a reality. Please call my office and we can go over your particular situation today.
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