How To Buy Foreclosed Homes to Live In
One of the biggest questions people ask is how to buy foreclosed homes to live in. This article gives you the pro’s and con’s and the in’s and out’s on how to go about it.
by foreclosure-investor-seminar">Alexis McGee
Buying foreclosure properties has always been a red-hot topic among real estate investors. But what if you are a home buyer simply looking for a good deal on a house to live in? Is it worth your time and energy to pursue foreclosure properties? And how does it work?
The short answers are – YES, YES and Read On…
While the current rise in home foreclosures has a negative impact for some, it has certainly spurred the real estate buying community. Why pay retail when you can pay wholesale, right?
The first step to buying a foreclosed home is to track foreclosures in your area. There are plenty of web-based services to help you do this, but in my humble opinion, foreclosureS.com is the best by far. Check out a FREE 7 Day Trial NOW!
In this months article I will explain some of the fundamentals of buying foreclosure real estate in the U.S. But first, let’s review the terms. foreclosure is a legal process through which the homeowner’s property rights are terminated, usually due to a failure to make the mortgage payments. A foreclosure home can be in one of the three foreclosure stages as described below.
1. Pre-foreclosures
A Notice of Default or Lis Pendens notice is publicly filed and the property owners are now “in default on their mortgage”. This is also known as the first stage of foreclosure. Based on the state the house resides in the owners have a set amount of time (varies from 3 weeks to 12 months) to remedy their problem (which includes selling their home) before their house is scheduled to be sold at the public foreclosure auction.
2. foreclosure Auctions
A Sheriff or Trustee Sale notice is publicly filed stating the details of an upcoming foreclosure auction. This is also known as the second stage of foreclosure. In some states they skip the pre-foreclosure notice and use one Trustee Sale auction notice to announce the default and future auction date all in one notice. The foreclosing lender sets the auction opening bid at the unpaid balance, plus penalties and fees for their defaulted loan. The amount does not include senior loans or liens on the property, which the winning auction bidder automatically assumes. The auction date and time can, and oftentimes will, be postponed by mutual consent, without refilling the notices.
3. foreclosed or REO (Real estate owned) foreclosures
REO properties that have been foreclosed and “repossessed” through a public foreclosure auction and the foreclosing lender owns the property and their original loan is wiped out. All junior loans and liens are also wiped out by the foreclosure auction. Senior loans and liens stay on the property and are automatically assumed by the junior foreclosing lender.
Which is the best way to buy a foreclosure home to live in?
Typically, the best way is not always the easiest way. As always, there are pros and cons to everything, so you must decide which way works best for you.
Pre-foreclosures Summary
As you can see, there are a few more Pros than Cons on buying pre-foreclosures. So if you don’t mind spending the time and energy to first FIND a hiding owner in default who is not in the MLS (multiple listing service) and contact him/her directly – then pre-foreclosure buying is for you.
However there is a lot for you to learn about how to buy a pre-foreclosure house especially if you are not using the help of an experienced real estate agent. Whether you buy one home to live in, or many for investment, you still must make sure you are getting a great deal AND you know how to do the following:
1. Find the best pre-foreclosure leads in your area HERE.
2. Find the owners in default who are hiding.
3. Contact the owners in default by phone and door.
4. Determine current market value.
5. Determine your costs to buy and fix the property.
6. Determine and negotiate your best offer.
7. Determine the loans and liens on the property.
8. Learn and Adhere to your State foreclosure Laws.
9. Complete an Offer to Purchase.
10. Find financing (Subject to existing or new financing)
The Step by Step instructions on how to buy a pre-foreclosure home, so you can save 20%, 30%, 40% or more on your home purchase are available HERE.
REO foreclosures Summary
As you can see buying Bank Owned REO foreclosures are definitely the “easiest” way to buy a foreclosure. So if you don’t mind working through the maze at the bank, either on your own, or through the help of a Realtor, REO’s are for you.
However there is a lot for you to learn about how to PRICE your offer so you don’t pay too much! Whether you buy one home to live in, or many for investment, you still must make sure you are getting a great deal AND you know how to do the following:
1) Find the best REO leads in your area.
2) Find the REO Lender’s Asset Manager or Agent.
3) Determine current market value.
4) Determine your costs to buy and fix the property.
5) Determine and negotiate your best offer.
6) Determine the loans and liens on the property.
7) Complete an Offer to Purchase.
Find Financing.
9) Close your escrow quickly.
The Step by Step instructions on how to buy a REO foreclosed home, so you can save 20%, 30%, 40% or more on your home purchase are available.
Where Do You Begin?
Before you can buy a foreclosure home you have to start tracking them in your area. Do a quick 7- day FREE “test run” with foreclosures.com to see what we have in your area. The key to buying a foreclosure is to stay on top of the market and move quickly when they become available.
So after you’ve completed a Search in your area, Save your Search and Setup a Free Email Notification on all new foreclosure leads that fit your Search Criteria.
Using foreclosures.com’s top notch Tracking Service will keep you notified of all new foreclosure Leads in your area – so you can buy wholesale, rather than retail, on your next home purchase.
I trust The information that you read here will be helpful in making an informed decision when it comes to how to buy foreclosed homes to live in.
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- Buying Foreclosures May 20, 2012
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How To Buy Foreclosed Homes to Live In…
One of the biggest questions people ask is how to buy foreclosed homes to live in. This article gives you the pro’s and con’s and the in’s and out’s on how to go about it.
by Alexis McGee –
Buying foreclosure properties has always been a red-hot topi…
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