How do foreclosures work?
June 9th, 2010
My husband and I really want to buy a home, we’re tired of renting and feel as though we are merely throwing our money out the window by doing it. We’re pretty sure that a foreclosure is the way to go, but we’re young, I’m only 22, and we aren’t 100% sure on how they work. We realize that sometimes houses that go into foreclosure aren’t always in the best condition, but seeing as my husband is a contractor, a fixer-upper would be ideal. Could someone explain how buying a foreclosure works to me? Thanks!
First you need to know what you may qualify to purchase, (keep in mind that what you are comfortable with in a monthly mortgage payment is not the same as the limit your can afford to buy). Talk with several lenders. You are first time buyers, so you would be entitled to the government $8000 off your taxes, but you need to buy before Nov 30 of this year. So get moving.
After you know what you can afford to buy, then you need to work with a Realtor that has experience handling foreclosure sales.
You might want to avoid "short sales". That is where the owner is trying to sell before foreclosure and requires the lenders approval. It’s a pain in the ass and most lenders can’t make a damn decision. So stay away from these.
Bank owned or corporate owned means it has already gone thru the foreclosure process. The lender owns it can still take time to get answers. But when it’s corporate owned (by investor) most times the answer is quicker. Althought, if owned by Fannie Mae or Freddie Mac their are the best, you will get anwsers within 2 days.
Once you find a place, all I ask is that you do two things #1 have a whole house inspection which can cost $300-$475, and at closing by title insurance.
June 9th, 2010 at 8:41 am
Buying a foreclosed property is much like buying any other property. The vasy majority of foreclosures are listed by real estate agencies for sale. You place an offer just like you do on any other. Inspections are allowed (and recommended) so that you can detect any serious issues before you finalize the contract. A difference here is that lenders who own foreclosed properties generally will not repair anything. They will negotiate price instead.
Don’t expect the utterly fantastic deals you hear about on TV or read on the internet. While foreclosed properties CAN be good deals, not all are. The lender will get as much out of the property as it can. I’ve seen some local foreclosures go for $20-30K OVER asking price.
References :
June 9th, 2010 at 9:15 am
First you need to know what you may qualify to purchase, (keep in mind that what you are comfortable with in a monthly mortgage payment is not the same as the limit your can afford to buy). Talk with several lenders. You are first time buyers, so you would be entitled to the government $8000 off your taxes, but you need to buy before Nov 30 of this year. So get moving.
After you know what you can afford to buy, then you need to work with a Realtor that has experience handling foreclosure sales.
You might want to avoid "short sales". That is where the owner is trying to sell before foreclosure and requires the lenders approval. It’s a pain in the ass and most lenders can’t make a damn decision. So stay away from these.
Bank owned or corporate owned means it has already gone thru the foreclosure process. The lender owns it can still take time to get answers. But when it’s corporate owned (by investor) most times the answer is quicker. Althought, if owned by Fannie Mae or Freddie Mac their are the best, you will get anwsers within 2 days.
Once you find a place, all I ask is that you do two things #1 have a whole house inspection which can cost $300-$475, and at closing by title insurance.
References :
June 9th, 2010 at 9:42 am
foreclosure works on a simple principle…. you keep your house as a mortgage to bank…. and take money from bank as loan.. to buy the house….. with the term signed that you will return the money to the bank till a definite period of time…. and if you don’t pay the money back on time then the bank has the right to sell your property… the selling of property is the process known as foreclosure
you can check this link to know all about it http://foreclosureworkouts.info/
References :
http://foreclosureworkouts.info/
June 9th, 2010 at 9:55 am
You can find foreclosures in your area by checking with the local courthouse. Many of them post the foreclosure notices on a bulletin board. be sure to get prequalified so that you know how exactly what you are in a position to purchase.
References :
http://www.northstarstateauctions.com/texas-foreclosures.htm