Bad things can happen to good people and we’ve seen this many times, especially when it comes to owning real estate. Many people get themselves into situations beyond their means and the end result in real estate is often foreclosure. Yet, this opens the doors to incredible opportunities to purchase a home at a bargain.
Just about every consumer has heard about buying a foreclosure yet many shy away from these types of transactions because of misconceptions. Foreclosures are abundant in the marketplace and can save you anywhere from 20 to 40 percent off the selling price; sometimes more.
Are you hesitant to purchase a foreclosed property?
Myth #1 – Foreclosures are only found in the bad neighborhoods. This is certainly not true. Foreclosures can occur anywhere. People have mistakenly assumed that foreclosures are always the result of financial irresponsibility and this usually occurs in more crime ridden neighborhoods. Foreclosures have been caused by divorce, medical and health problems, predatory lending and death, just to name a few. Everything from estate homes and undisturbed lots to townhomes, condos and mobile homes have been foreclosed upon. Real estate agents have access to lists containing all the foreclosed properties available for sale.
Myth #2 – I must attend the auction to buy the property
Foreclosure notices are published for several weeks before the auction. This in-between period is referred to as the pre-foreclosure. Real estate agents can easily find homeowners in the early stages of foreclosure and work out a deal. Buying a pre-foreclosure does have its advantages. The homeowner is a bit more desperate to avoid the actual foreclosure. In addition, you are able to actually perform a walk-thru of the home and inspect before placing any contract.
Myth #3 – The only source of foreclosed properties is at courthouse auctions
Many potential homebuyers envision bidding on the courthouse steps to purchase a foreclosure. The fact is there are other opportunities to purchase a foreclosed property with less stress.
Lenders have an abundant inventory of foreclosed properties that never sold; these are referred to as REO properties. REO properties have several advantages;
• You can fully inspect these properties because in most cases the previous owners have already been evicted.
• You can bring a contractor with you to get a detailed list of what needs to be fixed and/or replaced and make an educated assessment of the property.
• Lenders are offering bargain-basement deals on these properties and since they are losing money on their inventory, they have an incentive to quickly sell.
No matter how hard you try when you’re buying any home there are risk involved. Taking on new challenges can be intimidating, yet buying a foreclosure isn’t so complicated that you should avoid this type of transaction. It only takes time and an experienced real estate agent.
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