When a buyer stops making payments on a property, the lender has the right to reclaim the property and resell or auction it to reclaim their investment. While this is rarely a happy time for sellers, foreclosures can provide an excellent opportunity for buyers who are willing to do their homework and research available properties. When housing inventories are high, lenders are under pressure to sell foreclosed houses quickly, creating significant values, particularly if buyers are able to invest some time upgrading a property.
The real estate market and economy are beginning to recover, and with prices rising, investors are heading to foreclosures, looking for a bargain. There are plenty to be found, but there’s plenty of danger, too. Before you dive into the foreclosure market, do a bit of homework. Here are some good places to start.
Not all foreclosures are the same. In fact, some of them aren’t even true foreclosures. Foreclosure is a multi-stage process that can take up to a year, and discounted homes are available in each stage.
Stage 1: Pre-foreclosure
Pre-foreclosure is essentially a warning phase, in which the lender gives a property owner a grace period before calling in their loan. Sometimes, an owner can make good on back payments and resume their original mortgage. If not, to avoid defaulting, an owner will sell their house (and the mortgage) to a third party, usually at a substantial discount from market value. One person’s misfortune can be another’s gain, but pre-foreclosure sales can be risky, and often require permission from the lender. Unless you are a financial expert with substantial real estate experience, enlist an experienced real estate agent to help guide you through the process. An agent can help you determine which properties are true bargains, and can ensure that your pre-foreclosure sale meets all legal and regulatory requirements.
Stage 2: Public auction
When the pre-foreclosure phase ends, lenders will often auction the property to the public. There are still bargains to be had, but competition can be fierce, and it may drive up prices beyond a property’s actual value. If you plan to buy an auctioned property, perform as much research as you can before bidding. Research comparable properties in the same neighborhood, enlist an expert to inspect the construction and amenities, and visit as many auctions as possible to get a “feel” for the process. Above all, don’t get caught up in emotion. Today’s ”deal of a lifetime” will probably come again next week.
Stage 3: Bank-Owned (REO)
Lenders will often sell bank-owned properties (often called “Real Estate Owned,” or REO) at a discount to recoup their lost investments. You can still get a substantial discount on REO properties, but be prepared to do more pre-sale research and some post-sale repairs. During the foreclosure process, owners have neither the money nor the inclination to keep up their homes, and some deliberately damage the property. SInce most REO properties are sold “as-is,” be sure to hire a qualified home inspector so you know exactly what’s on your plate.
There are great deals to be had on foreclosed and pre-foreclosure properties if you keep your eyes open. Do your homework and you might just land a bargain.
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Living near a vacant home doesn’t have to mean putting up with overgrown grass and unshoveled snow. Does your community use these eight common local laws, programs, and regulations to force owners to maintain vacant homes?
With the foreclosure crisis, you may have noticed a vacant home or two on your block. Rather than see the home free-fall into disrepair, push local officials to take action before the untended house lowers the value of your own home. Continue reading →
With foreclosure rescue scams widespread as more homeowners fall behind on mortgage payments, be smart if you seek help.
A record high 2.8 million properties were hit with foreclosure notices in 2009, putting even more Americans at risk of facing foreclosure rescue scams. Homeowners who fall behind on mortgage payments need to tread carefully when seeking assistance, since foreclosure rescue scams come in many guises. A day spent researching legitimate options, from a mortgage modification or principal forbearance to a short sale or deed-in-lieu, could keep you from becoming a scam victim. Continue reading →
Foreclosure counselors can make the difference between losing your home and keeping it. Here’s how they work and how to choose one.
If you’re facing foreclosure, your foreclosure counselor will be a key part of your foreclosure team. As you start looking for one, however, you need to know what exactly they do, what they don’t do, and how to choose one who’s legitimate and qualified.
What a foreclosure counselor does
• Reviews your finances
• Helps you establish a budget
• Explains your non-foreclosure options, such as loan modification, short sale or deed in lieu of foreclosure; helps you navigate the process with any chosen option
• Advocates on your behalf with lenders and loan servicers Continue reading →
Add attic insulation to lower heating and cooling costs by as much as $600 per year.
Save about $600 per year by boosting the amount of attic insulation from R-11 to R-49. Depending on the type of materials you use, figure on paying an insulation contractor about $1,500 to insulate an 800-square-foot attic, which pays back your investment in three years. You’ll spend about half that to do the job yourself.
Do you need more attic insulation?
A good, quick way to check if you need insulation is to look across your attic floor. If the existing insulation comes up just to the tops of the joists, then you probably need to add insulation. If you can’t see the joists and the insulation is well above the tops of the joists, you’re probably okay and you won’t recoup the cost of adding more. Continue reading →
Buyers only get one first look at a property, and they don’t want to use their imagination. They assume the house they see is as good as it’s going to get. If you want your home to sell, step out of your comfort zone and think like a buyer. Here are three ways to help you turn your house into the home of someone else’s dreams. We’ve broken down each category into low-cost, “Basic” tips and tricks, and an “All-Out” blow-the-budget transformation. How far you take it is up to you. Continue reading →
Ask detailed questions about their experience and skills to help you find the right agent for your home sale.
Working with the right real estate agent can mean the difference between getting prompt, expert representation and feeling like you’re going it alone when selling your home. Here are 10 questions to ask when you’re interviewing agents. Continue reading →
Have a plan for reviewing purchase offers so you don’t let the best slip through your fingers.
You’ve worked hard to get your home ready for sale and to price it properly. With any luck, offers will come quickly. You’ll need to review each carefully to determine its strengths and drawbacks and pick one to accept. Here’s a plan for evaluating offers. Continue reading →
According to a study conducted by the National Association of Realtors (NAR) and the American Society of Home Inspectors (ASHI) in 2001, 97 percent of home buyers who received home inspections believe they received a good value for their money. A home’s history gives it character and charm, but also takes a toll.
Over time, roofs sag, mortar cracks, and furnaces lose efficiency. Beyond this normal wear and tear, older homes can harbor mold, water damage, termites, or other structural threats that can cost tens of thousands of dollars to fix. Continue reading →
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By: Mariwyn Evans
By: Donna Fuscaldo
By: G. M. Filisko
By: Jeanne Huber
Buyers only get one first look at a property, and they don’t want to use their imagination. They assume the house they see is as good as it’s going to get. If you want your home to sell, step out of your comfort zone and think like a buyer. Here are three ways to help you turn your house into the home of someone else’s dreams. We’ve broken down each category into low-cost, “Basic” tips and tricks, and an “All-Out” blow-the-budget transformation. How far you take it is up to you.
By: G. M. Filisko
By: G. M. Filisko
According to a study conducted by the National Association of Realtors (NAR) and the American Society of Home Inspectors (ASHI) in 2001, 97 percent of home buyers who received home inspections believe they received a good value for their money. A home’s history gives it character and charm, but also takes a toll.
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