At any given time, about 2% of residential properties in the USA are facing a foreclosure. Foreclosure rates rose in 42 states throughout 2011, and some states have particularly high rates. Foreclosures can create interesting investment opportunities. It is often possible to buy foreclosed property at 50% to 70% of market value, making foreclosed property a real bargain. Like all investments, however, real estate is unpredictable, and without the right knowledge and support, you can run a much larger risk of losing money.
What Are They?
A foreclosure occurs when a homeowner defaults on his loan, meaning he can no longer pay his mortgage, and the lender chooses to collect their owed money by putting the property up for sale. There are different types of foreclosures, but one of the most common is a bank foreclosure, which occurs when the property owner borrowed funds from a bank. If you default on loan payment, the bank or mortgage company can file legal motions to possess your home to get back the money owed. Different states have different procedures but usually, within one year of defaulting, the lender will legally have possession of your home. In order to buy a foreclosed property, you must be at the auction in person, and you must pay the total amount of the property in cash.
How To Face Foreclosure
Although facing foreclosures can be incredibly difficult and stressful, there are many options available to those facing foreclosure. Mortgage brokers and negotiators may try to contact you if there is enough equity in your home. If you have enough equity, you may be able to refinance your home to prevent foreclosure from taking place. In some situations, you may file for Chapter 13 bankruptcy in order to save your house. Also, you may sell your home before actual foreclosure takes place, allowing you to pay off the mortgage debt and possibly come out with some extra money. In any case, it is best to speak to financial, legal and real estate in Syracuse professionals who can give you valuable advice should you miss a mortgage payment.
Why Should I Be Interested?
Buying foreclosed real estate is a different game from buying property directly from the owner. After a lender comes in legal possession of a property, the property is then appraised and sold at auction. Foreclosure auctions may provide you with the possibility of buying a home more valuable than you could ordinarily afford. If you want to view a foreclosure first hand, you must use an agent. Housing and Urban Development employees do not work directly with buyers.
If you want to place a bid on a home, your agent will present it for you with a deposit. If your bid is accepted, Housing and Urban Development will pay your agent up to 7% of the accepted price. It is both possible and recommended to have an inspection of any property you are considering buying. This way, you can see what repairs are needed, and you will have a better idea of an asking price.
Looking at our local economy, many foreclosed Syracuse NY real estate properties are undervalued at appraisal because of the large volume of homes government agencies have to process. Buying foreclosures can be a great investment opportunity, but if you are not experienced in or knowledgeable about the real estate industry, seek the help of an experienced real estate agent to help make your transaction a success.