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Buying Foreclosed
Properties
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Buying foreclosed properties is a great way to save your pennies on
your real estate endeavors. While most properties that have been foreclosed
upon sell for five to ten percent below normal selling price, there
are some out there who may be selling for as much as twenty to thirty
percent below market value.
While purchasing foreclosed homes is a great way to buy, sell, and make
a profit, there is a process to the purchasing of these properties that
must be followed by everyone. When a home is being foreclosed upon
it means that the home owner was unable to make their mortgage payments
on time and fell more behind than their bank or lender allowed. Usually
the mortgage loan is taken against the house, there by granting the
lender or bank the right to seize the property as fulfillment of their
loan.
As far as purchasing foreclosed properties go, there are some advantages
to buying properties this way that buying properties the normal traditional
way do not offer. Appraisal fees can range anywhere from $300 to $600.
During an appraisal, a professional appraiser inspects the property,
measuring the square footage, inspecting the yard, fencing, garage,
and other appurtenant structures. They will also do an inspection of
the property itself; things like pools, decks, number of bathrooms,
number of bedrooms, and such are all taken into consideration when evaluating
the value of a particular property or home. The appraisal process can
be rather tiresome, as an appraisal is simply the appraiser's professional
opinion. If the lender, bank, or purchaser does not agree with the
figure the appraiser comes up with the appraisal is disputed and the
process begins again. When you buy a property that is being foreclosed
upon, the appraisal process can usually be skipped because the lender
already has some idea of what the property is worth. This saves both
of you money, and can make the buying and selling process a lot easier
and smoother on everyone's behalf.
Buying properties that are being foreclosed upon is a great way to locate
a fixer upper that is worth the work. Usually foreclosed homes need
repairs because the owner was, obviously, having some financial troubles
that caused them to get so behind in the payments. This is an indicator
that there may be problems with the roof, plumbing, or even the yard
that need fixing. These are all things that can add to or take away
from the market value of a home, and if you can purchase a home with
these problems and you have the ability or monetary reserves to correct
these problems, you have found yourself a nice little cash bucket.
The Department of Housing and Urban Development, also known simply as
HUD, also holds auctions periodically to unload homes that were funded
through their federal mortgage program. Sometimes these houses can
be bought at rock bottom prices and are not in as bad condition as one
might think, although the auction environment can drive prices up in
others' determination to secure a particular property for their own
needs, personal or business related.
About The Author:
Peter Dobler is a veteran in the IT business. His passion for experimenting
with new internet marketing strategies leads him to explore new niche
markets.
Read more about his experience with real estate; visit
http://real-estate.online-business-idea.com
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