The Finer Points of Buying Home Foreclosures
It is a thrilling prospect to finally own a home. In the current economy though, there is a high mortgage repayment delinquency rate. Many borrowers are defaulting on their mortgage payments and there is a high rate of home foreclosures. Faced with such circumstances, many are opting for foreclosure rather than having their home repossessed.
With so many foreclosures, this is an opportune time to buy property be it by an individual or investors who can buy in bulk while prices are low and sell for a tidy profit when the real estate picks up.
Shorter process, reduced costs
More and more people are opting for DIY foreclosure. This is where a seller sells directly to an interested party rather instead of having a bank or other lender do it. This is also known as a short sale. This is done to raise the money still owed on a house as quickly as possible. For the buyer, it cuts losses in the long term as houses continue to lose value because the selling process is shortened. For the buyer, one of the advantages and finer points of buying home foreclosures is the low price such sellers ask for. (beware - short sales can damage your credit as the homeowner/seller)
Buying directly cuts not only the transaction period but also costs like survey fees, realtor fees, closing costs and other expenses. The two parties negotiate the offer made by the buyer or the selling price offered by a buyer and come to an agreement.
Get it checked
Another one of the finer points of buying home foreclosures is to be very cautious about what one is getting into. One cost worth incurring is that of getting the property evaluated to ascertain its worth so that one does hand over money for what seems to be a really good deal only to find that is has architectural and other limitations that lower its value considerably.
Get it written
It is also important to get a formal agreement detailing the terms of the sale of a house. This should be done by a real estate lawyer. They will verify details such as the liabilities the seller has declared and that the buyer has accepted and that the seller is the authentic owner of the property. This is reflected in the agreement so that the buyer is protected should other parties later claim the property and if the seller fails to disclose every liability related to the property.
Learn more about buying and fixing up foreclosures - download "The FHA 203k Survival Guide" at the button below. Whether you're buying a foreclosure with the 203k or a HomePath Renovation, educating yourself is key.
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