| With the housing market in a slump, it may seem like | | | | home is through a “preforeclosure,” in which |
| a good time to get a good deal on a foreclosed | | | | you buy straight from the homeowner. Unlike an |
| home. Although foreclosures are increasing across the | | | | auction, the buyer and seller are able to negotiate. |
| country, you will not get the best bargain at an | | | | This means your likelihood of scoring a great deal on |
| auction. Consider options outside of an auction with | | | | a home greatly improves. You also get to send out a |
| these other methods of purchasing a foreclosed | | | | home inspector, which is highly recommended |
| home. | | | | whenever purchasing property. |
| Why Foreclosure Auctions Are Not The Best Deal | | | | Another approach is buying a home that could not |
| When you attend a foreclosure auction, you | | | | sell at an auction, and has been put back on the |
| compete with local investors. These professionals | | | | market by the bank. These “real estate |
| know how much a property is really worth. They will | | | | owned” houses, or REOs, are usually better for |
| either beat you to the punch or back off so you pay | | | | first-time buyers. Work with an experienced Realtor |
| more than its real value. Moreover, many foreclosed | | | | and be realistic about your offer. |
| homes have a huge mortgage, so banks incorporate | | | | Foreclosure Do’s And Don’ts |
| that cost into the total starting price. | | | | Remember, the homeowner is not the bank. You |
| The market predicts that foreclosed homes will | | | | cannot just show up and expect to see the home. |
| quadruple in 2008, which means there are plenty of | | | | Send a letter and follow up with a phone call. |
| choices available. Instead of attending an auction, look | | | | Always thoroughly research the properties that |
| for bargains by finding out what the foreclosure laws | | | | interested you. Avoid places with tax liens, multiple |
| are like in the state you want to buy. Sometimes | | | | mortgages or other legal issues. |
| they start when the lender sues the homeowner for | | | | Buying a foreclosed home takes patience and |
| failing to pay the mortgage, yet no matter how it | | | | diligence, so do not be discouraged if you cannot find |
| begins, foreclosure filings are public documents that | | | | something right away. However, with so many |
| allow you to contact the homeowner directly. | | | | homes flooding the market, the chances of finding a |
| Foreclosure 101 -- How To Buy Without An Auction | | | | good deal are not that difficult. |
| A more effective to way to purchase a foreclosed | | | | |