As of now, investing in foreclosures is considered a smart and well thought out strategy to make money and get rich. The foreclosure proceeding provides two opportunities in foreclosure when a proper settlement can be reached. You can choose to buy a home in the pre-foreclosure phase and the second option is in the auction phase. In any of these phases, you transact with homeowners who have to sell their property or lose it for nothing. So, since they are running out of luck, they are eager to accept deep discounts. Additionally, the risk associated with real estate foreclosure is low, since you have ample time to research, work on sales comparables, and judge the property. Competition is less severe and you can’t go wrong with dealers when buying a foreclosed property. So if you get a good deal, you can save significantly.
So if you are planning to buy a real estate foreclosure, you should take a deep look at all the investment opportunities available through this process. If you are moving toward foreclosure with a “pre-foreclosure” stage, this stage requires direct contact between the seller and the investor. This is a can’t-lose occasion, as both parties tied to the deal are eager to hit their targets. A significant discount, a low cash down payment, and compatible sales agreements make foreclosure real estate a great investment opportunity. The downside to this approach is that first, it’s hard to find a foreclosed homeowner, and second, you may face stiff competition, which could drive up your rates.
The second method of purchase is the auction or sale of real property in foreclosure. The auction is the next logical step when the sale is not made during the execution process. You can think of the finisher as a weapon with a pointed blade; You can hit the bonanza or lose it all. When there isn’t a lot of competition, the biggest advantage of a foreclosed property is the potential profit it can provide at auction, especially since there isn’t a lot of competition for foreclosed properties sold at auction. However, the threats in the auction are oversupply, the infeasibility of examining the seized properties, paying the sale amount on time or expelling the tenants who remain in the seized homes.
However, after the auction, if the foreclosed property still does not sell at auction or the scenario is that the lender ends up as the highest bidder, the property becomes REO, or real estate held by the bank. Banks then sell these REO properties on the open market primarily through a real estate agent or through some third party marketing company. Here you also have great scope to purchase the property at prices below market value, therefore the opportunity to turn the foreclosure into your personal real estate.
There are many websites online that offer trial memberships, feature various foreclosure listing sites, and examine the ones that offer the best strategies. On the Internet, you can search various websites by state, county, city, and zip code, wherever you are interested in shopping. You can then evaluate these foreclosure listing sites and find the ones that offer you the best price and value for money. You should take advantage of the free trial offered to browse the listings with the daily updates.
Copyright © 2007 Joel Teo. All rights reserved. (You may republish this article in its entirety with the following author information with live links only.)
