Buying Foreclosure properties
With the current state of the market, buying foreclosure properties can be plentiful. There are various ways to do this:
1. Buy foreclosure properties at the auction steps in the county that you want to buy in. This is when the bank is taking back the property from the borrower. If no one bids on the property, the bank is now the owner of the property.
2. Buy pre-foreclosure properties: This is the process before the bank takes the property back. You may see a lot of listings now that say, 'Pre-foreclosure' or 'Short Sale'.
3. Buying REO: This is Real Estate Owned where the bank already owns the property and is trying to sell the property.
Most people think that they are getting a great deal buying foreclosure properties, that all depends on what you are going to do with the property. If you buy #1 properties then you have to have to pay cash for the properties in AS-IS condition and sometimes you don't even know what you are buying. You can't inspect the property.
If you buy #2 properties, it takes MANY MANY months to get a short sale approved. This is usually taking 6 months to get the approval. Don't expect it to go fast or easy. I know many buyers who think it's a traditional transaction and get financing or plan to move in 30-45 days. That is NOT the case. It is a very LONG process.
# 3 properties can be closer to a traditional transaction. The bank knows that you will need 30-45 days to get new financing and you will have contingencies to your purchase and sale agreement.
I prefer to buy #2 pre-foreclosure properties since I get to view the property and do my own inspections to know what I'm buying. Plus I get it at a great price.
NOW is the time to BUY!!! Buying foreclosure properties is a great way to build wealth.