If you are looking for greats deals on properties for sale, you should talk to a realtor about the distressed properties in the area. These will include homes that have gone through foreclosure and homes that are about to go through foreclosure. There are a few concerns and special issues that go along with buying such properties. Here is a bit of information to help you understand what is going on with the property and how to proceed with buying one.
These homes have been repossessed by the lending institution because the previous owner failed to make the mortgage payments. After the court grants the foreclosure, there will be an auction for the property. You can attend this auction and bid on the place but in many cases the lending institution bids and wins the auction. They do this so they can resell the property and hopefully regain more of the money lost on the defaulted loan. If the lending company wins back the property, you can approach them to discuss buying it. They do not want to hold onto the property for long so are often willing to make a very good deal on it.
When the lending institution has filed for a foreclosure but it has not yet been approved by the court, the property is said to be in a pre-foreclosure state. The person who defaulted on the loan is still the legal owner of the property. If the property's value has decreased to the point where the current amount owed is much less than the worth of the home, you probably will not get a deal on the house. The owner needs to sell it for at least the amount owed. However, if the current owner has paid the mortgage down to an amount that is less than the value of the home, you can get a great deal. If you really like the home, you may be able to work with the current owner for a second mortgage. In other words, you get a loan for the value of the property and then the current owner holds the loan for the remaining balance. This way a foreclosure is avoided. However, you need to make sure that the money you pay on the second mortgage is going to pay the balance on the original loan. In most cases, you are going to need the approval of the current owner's lending institution to make this deal.
Keep in mind that distressed homes are often sold "as is." This means that if there are problems with the property such as a bad roof, destroyed HVAC system or other things that will require costly repairs, you are going to have to pay for these out of your own pocket. Pay close attention to what a home inspection turns up because this will only add to the amount of money you will be putting into the place. If there is a lot wrong, make sure you are getting a very low purchase price or the deal probably will not be worth it in the end.Share
20 December 2016
Although I've never worked professionally in the real estate business, I sure know my way around it. How, do you ask? Well, I have simply rented a lot of different places and worked with a lot of different landlords and real estate agents. In the past 7 years I've lived in 11 different houses or apartments, none of them my own. In finding those 11, I have looked at literally hundreds of apartments. I used to hate house hunting, but now it's kind of fun. You just need to know what you want and the right questions to ask. Hopefully this blog can help you learn some of the tricks of the trade from another renter like yourself.