Foreclosed properties for sale: A guide

By Danon Burnside

FORECLOSED PROPERTIES FOR SALE:

A guide to your foreclosed properties for sale

A foreclosure is a saddening event, a herald of the tiding that an American’s dream of owning a home has been shattered, albeit temporarily. Ironically, the Covid-19 pandemic lessened the rate at which foreclosures occurred last year, given that lenders were unwilling to foreclose properties and went for novel negotiations instead - unlike what happened in the 2008 global economic meltdown. Nonetheless, for those seeking to own homes or invest in real estate at cheaper sums, finding a deal for foreclosed properties is god-sent.

In this article, we will be guiding you through all you need to know about foreclosed properties for sale, from the finding them to making the decision on whether to purchase one.

WHAT IS A FORECLOSED PROPERTY?

A foreclosed property is one in which ownership is transferred to a financial institution or lender as a result of default in the repayment of a loan by the former property owner. The foreclosure process serves to help a lender recover the debt on a defaulted loan.

Here’s what you should know about foreclosure and foreclosed properties: • Foreclosure occurs when a lender wishes to take over a property because the owner has defaulted in the settlement of a mortgage loan or failed to meet other requirements of a mortgage agreement. • Property owners are given 30 days to settle their mortgage obligations before the property is foreclosed. • There are several stages involved in a foreclosure process, which may vary for each county. The stages often include Preforeclosure, Short Sale, Sheriff’s Sale Auction and Bank/Government ownership.

MERITS AND DEMERITS OF FORECLOSED PROPERTIES

Acquiring foreclosed properties have both their advantages and downsides. The primary advantage of buying foreclosed homes is that they are much cheaper than similar houses in the same area. On the flip side, foreclosed properties usually require much improvements - renovations and repairs. They usually carry “as is” conditions at sale. Besides, some might still have liens or mortgage payments attached to them, which a new owner can inherit.

Thus, it is necessary that you evaluate this carefully before seeking to purchase any foreclosed property which is for sale.

HOW TO FIND FORECLOSED PROPERTIES FOR SALE

In San Bernardino County, CA, 1 in every 5145 homes are foreclosed annually. That is about 0.02% of all real estate, a bit higher than the Carlifonian and national average of 0.01%. Thus, there is a better chance of finding foreclosed properties for sale in the county, but with so many other real estate investors on the lookout for them as well, you have to know your way around it.

Below are a few tips to finding such properties that would be a great fit for you.

• Check out bank websites. Banks often display the foreclosed properties they have for sale on the internet. Details such as selling prices, images of the homes, descriptions, and agent contact info are listed as well. If you find them limited, you can also check out Fannie Mae and Freddy Mac’s websites for their listings as they buy mortgages from the banks. • Government-owned listings Governments agencies, such as the Department of Housing and Urban Development, showcases their foreclosed properties on its website. They also utilize local real estate agents for that purpose. • Employ a foreclosure-listing service or an Agent Firms like RealtyTrac offer comprehensive foreclosure listings at reasonable prices. Also, you can employ real estate agents to take care of the search as they are usually familiar with the market and would be aware of properties close to foreclosure.

TIPS FOR PURCHASING A FORECLOSED PROPERTY

You can purchase foreclosed properties at any stage of the foreclosure process, right from the preforeclosure phase. At the Preforeclosure stage, the owner is still in control of the property as it is officially yet to be foreclosed. For Short Sale, the owner sells the home to you at a price below their debt, but you need the approval from the bank. Auction Sales mean just that - the opportunity to purchase already foreclosed homes at aunctions. And then you can buy these homes directly from banks or government departments.

Regardless of which stage of the process you choose to acquire a foreclosed property, here are some tips you should follow.

1. Hire an Experienced Real Estate Agent: The need to have an experienced realtor to guide you through the process can hardly be overstated. Besides, Banks usually prefer dealing with agents to individuals. 2. Get Your Cash Ready - or Your Mortgage Approval Letter It is more preferred that you have your cash ready beforehand. Otherwise, ensure that your mortgage loan has been approved. 3. Inspect and Carefully Consider Properties Before Purchase It has been said again and again that foreclosed properties are usually not in a pretty state. Although banks will hardly agree to make repairs, you will have the permission to inspect. Do this and then consider whether it is worth your money.

References

https://www.investopedia.com/investing/buying-foreclosed-home/ https://www.rocketmortgage.com/learn/buying-a-foreclosed-home-pros-cons-and-how-to-purchase https://money.usnews.com/money/articles/2008/02/06/5-ways-to-find-deals-on-foreclosed-homes https://www.fortunebuilders.com/pre-foreclosures/ https://www.realtytrac.com/statsandtrends/foreclosuretrends/ca/san-bernardino-county/