You might occasionally come across a home that is about to be foreclosed on or that already has been foreclosed on. Both of these situations present the potential for getting a great bargain as long as you know what you might be getting into. To find out more, read on.
Mortgages That Go Unpaid
It's no secret that those who fail to meet the mortgage obligation can have their home foreclosed upon. For most homeowners, that mortgage bill is both the most important and the hardest to pay when times get tough. While some lenders can be understanding for a while, foreclosures can occur after a few months of non-payment. A foreclosure is a legal process, however, so it can take several more months before a homeowner is forced from their home and the lender takes possession. Since lenders are not meant to be in the business of dealing with real estate, the home has to be sold and any financial losses recouped. The lender has several options when dealing with a foreclosed property. They can contract a real estate auction company to dispose of the home or they might place the home on the market themselves. Foreclosed homes are often good bargains and seldom remain on the market for long.
What to Know About Foreclosures and Pre-foreclosures
Sellers who know they are unable to make the mortgage payment frequently attempt to ward off the bad mark that a foreclosure will give them by trying to sell the home themselves. These homes may be priced to sell as fast as possible. To know how to protect yourself when buying such a home or one that has already been foreclosed upon, follow these tips:
- Verify the rightful owner of the home by checking property records with the county.
- Contact a real estate agent to help you locate and purchase homes that are in distress. They can advise you on recognizing a good bargain when you see it and ensure all due diligence is performed.
- Have an appraisal performed to determine the real value of the home before you place an offer.
- Homes in this category can be less than move-in ready. Have an inspection performed and expect to deal with many repairs. Homeowners who are unable to pay their mortgage may also be unable to attend to regular maintenance issues. Additionally, some homes like this remain empty for an extended period of time, encouraging squatters and vandalism.
Speak with your real estate agent to learn more about foreclosed properties.