Foreclosure House For Sale – Public Auction
And Real Estate Owned Properties



Foreclosure house for sale – an avenue worth investigating when you are buying a home, as either a primary residence or for investment purposes.

Foreclosed homes can be a viable investment option, but as with all investment strategies, you need to undertake thorough research and be aware of potential pitfalls as well as the potential advantages.

An informed decision may see you actualizing a meaningful return on your investment and a great addition to your financial portfolio.

 

Foreclosure House For Sale

What are Foreclosed Properties?

  • The property is owned by a bank or financial institution.
  • This has happened because the previous owners could not keep up with the mortgage repayments.
  • Many foreclosed homes are also known as real estate owned property.
  • This happens when the bank owned property was not sold at public auction and the bank then asked the real estate agents to try and sell the property.

 How Can I Buy a foreclosure house for sale or residence?

  • You can either purchase a foreclosed residence at a public auction or via a real estate agent.
  • You can research your options for properties through newspapers, online real estate listings and property websites.
  • You can also search for repossessed properties by liaising with banks and auctions houses.
  • Note that there are two main types of auctions:

A public foreclosure auction and;

-The bank owns the property.

-But if the foreclosed home is not sold at a public foreclosure auction, then the bank allows the property to be listed with a real estate agent.

-You then make an offer to buy the foreclosed home from the real estate agent.

- If the foreclosed residence is not sold while it has been on the books of the real estate agents for a while, then the bank gives it to an auction company to try and sell.

A public auction via and auction company

-You can make an offer to purchase online or in person at most auction companies.

 

Keep in mind the following about auctions:

  • Auctions can be very quick and they don’t always give you much time to think about your offer.
  • You may not always be able to view or inspect the proposed property and may need to “buy” it from a picture and descriptions.
  • You won’t realistically know the condition of the property and you will not know what repairs and maintenance has been completed.
  • If at all possible try and get an inspection from a building inspector.
  • Ask them for information about the condition of the property, an approximate cost for necessary repairs.
  • If a property is too run down, it can be hard to get a loan to finance the property.
  • Some banks will not even give you a loan until all the fundamental repair issues have been addressed.
  • It is also a good thing to try and get a title search from a title company to verify that no one else can claim debts against the home that you are trying to purchase.
  • This will help you to work out a fair and realistic offer on the property.
  • Remember to set your budget and then stick to it.
  • Do not get caught up in a bidding frenzy.

 

Other financial considerations:

  • Purchasing a foreclosure home can be affordable, but it can also be difficult to negotiate.
  • Often there are many levels of approval to get, including bank approval or approval from the investor who owns the property.
  • Financing can also be hard to get because one often has to pay the full amount within a relatively short time frame.
  • The price is generally set at a realistic market value to get a quick sale with a fair price.
  • Remember to consider that you may need a “good faith” deposit; mortgage repayments; property tax and insurance when you decide on affordability.
  • It can be an advantage if you are prequalified with respect to how much you can actually afford to buy a foreclosed home for.
  • It signals a real intention from your side as a prospective buyer.
  • If you are planning to buy the foreclosure with the intention of fixing it up and then hopefully quickly re-selling it, then be aware of the property market.
  • If the property market is suppressed it may be hard to re-sell the house and you will be liable for the loan repayments.
  • In this case, it may be prudent to use the foreclosed property as an investment in rental property for a number of years and “profit” from capital appreciation when the market climbs.
  • If there are a lot of foreclosures in the market then it tends to point to a declining market.
  • Make sure that you have the financial safety net to weather a slow or suppressed market.

 


Other contractual and professional considerations:

Confirm that the real estate agent, the attorney and the financial institution all have experience in working with foreclosure house for sale - they need to advise you on a realistic price range and to expedite the necessary paperwork, legislation and legal processes.

Return From Foreclosure House For Sale To Money Saving Tips For Frugal Living

Return From Foreclosure House For Sale To Teaching Personal Finance