The Benefits of Buying a Foreclosed Home

The economy has affected most people, and it has come with few benefits. With high levels of foreclosed properties having hit the real estate market in recent years, there are great deals for those looking to become homeowners.

The below-market-value prices are leading bargain hunters and first time homebuyers to foreclosures across the country. With the abundance of foreclosed homes for sale, the market is ripe for extreme savings. It is obvious that foreclosure homes offer great deals, but there are a few items to know before diving into this deep market.

Pre-foreclosures

Pre-foreclosure occurs between the owner receiving Notice of Default, and the day the lender puts the home up for auction. There are great deals during this period because the owner does not want their property to progress past this stage. Short sales also occur during pre-foreclosure.

Short Sale

A short sale is the process when a buyer pays less than what the owner owes on the mortgage. Lenders must also agree to the short sale, and forgive the remaining debt. With the increase in foreclosure listings, many lenders agree to these terms to avoid taking possession of another property.

Overloaded with foreclosed homes, banks will be more open to the terms of the short sale. Prospective buyers are also able to see and inspect the home during pre-foreclosure. This benefit does not occur during the next stage of the foreclosure process.

Auction

After pre-foreclosure, the property goes to auction, where prospective buyers may have to bid on the property. In addition, prospective buyers must buy the home without seeing it or having a home inspection. The foreclosed home is paid in cash since lenders will not loan you money without an inspection of the property.

Bank-owned Properties (REO)

If not sold at auction, the bank takes possession. These properties are listed on the market much like a normal home. It is easy to purchase these properties, but the foreclosure deals are not quite as pronounced as pre-foreclosure and auction.

They are typically listed at about 95% of market value but are usually sold for about 10% to 15% less than this value. Furthermore, the property can have a home inspection and receive financing. Buying a bank-owned property has all the benefits of buying normal real estate but with a lower price tag.

If thinking about buying a home, websites listing foreclosure homes for sale are a great place to start. With the current economy, you can find a beautiful home listed for a lot less than market value. These homes save you money and act as smart investments.

Foreclosure.com is your source for all foreclosures nationwide. Search foreclosures, preforeclosures, short sales, and more.

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