subject: Ways To Buy Foreclosed Homes [print this page] If you're looking to make money in real estate, you probably know that foreclosed properties offer high profits and low risk for those who can buy and flip repossessed properties. Foreclosed homes that have been seized by the bank or government to cover unpaid loans or property taxes can be bought for a fraction of their actual market value. But where does an interested buyer find these opportunities?
There are three main ways in which investors can purchase foreclosed homes:
- Direct Homeowner Sales
Although banks are usually in a hurry to sell off foreclosed houses as quickly as they can, several factors can prevent them from evicting the owners and selling the homes quickly. The process of a home foreclosure involves a great deal of paperwork and red tape, and the law requires banks to give homeowners a chance to make good on their unpaid loans. As a result, homeowners might continue living in the house as it moves through foreclosure for anywhere from four months to a year.
It's possible for a real estate investor to obtain listings from a bank or mortgage broker of homes that are in the process of being foreclosed. They can then contact the owners privately to make an offer on the property. Homeowners may be willing to sell at lower prices to avoid having their credit rating hurt by a foreclosure.
Additionally, these types of sales end up in auctions as Short Sales where you can buy the home prior to foreclosure and proceed with a traditional real estate transaction based on your winning bid amount, subject to lender approval.
- Court Ordered Property Auctions
Also known as a trustee's sale, this is often a precarious way to purchase a foreclosed home. An auction on the court house steps as it is frequently known can be risky, since you won't be able to inspect the house and there may be significant liens on the property, but the rock-bottom prices do offer financial opportunities for investors on the right homes.
- Bank-Owned Properties
If a property fails to sell for its bid price at auction, a bank or real estate group may choose to refurbish the house and attempt to sell it on the regular market, for the full price. Other homes are returned to auction for a second try. These properties usually dont offer the same bargains as the other options, but can be found by contacting real estate agents or seeking them specifically in auction ads.
- Need to add our option Lender Foreclosed Home Auction
Foreclosed houses can offer amazing opportunities! Be sure to do your research when pursuing any of these options, and you could walk away with a great home, big investment earnings, or both.
by: Daniel Smith
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