Is It Wrong To Buy A Foreclosed Home?
Before the crash that she blamed on speculators, Senator Elizabeth Warren made a bundle by flipping houses. With foreclosures, a 3,500-square-foot house with a pool in a gated community might sell within days or hours, whereas more modest homes might sit on the market for weeks. Buying foreclosed homes doesn’t come without risks, and you should keep these risks in mind as you search through listings that may not tell you all of the information about a property. Clients who looking to buy now should focus only on what’s available for sale today.
For each foreclosure, the report shows the date and amount paid for the foreclosure deed, the year of the mortgage being foreclosed, and the original principal amount of that mortgage. If a VA-eligible borrower bids on a foreclosed property at a foreclosure sale auction, he or she may discover that a large sum of cash is to be delivered as quickly as 48 hours after the bid is accepted.
Along with the address, date and sales price is included the mortgage amount, if any, the year of the previous sale of the property and the price paid in that previous sale. We took a walk-through of the house with a local realty company assigned to the foreclosure, and immediately put in a bid—which, thanks to the foreclosure tag, was much less than the estimated asking price of all the properties in the vicinity of the home. The first step to working through a possible foreclosure is to understand what a foreclosure means.
Elaine Zimmerman, a real-estate investor and author, recommends that shoppers first visit any site with a database of foreclosed homes. With a 28 percent decline on a foreclosed home comes a 4 percent decline on neighboring homes – meaning a nearby home with an initial property value of $250,000 could see almost a $10,000 decline, just by being in a quarter-mile radius of a foreclosed home. We have the largest and most up-to-date foreclosure list in the United States, including foreclosure, preforeclosure, short sale and rent-to-own, among other, distressed real estate listings.
Foreclosure means the lender can auction off the property and use the proceeds from the auction sale to pay off or pay down the debt owed on the promissory note and thereby cut off the borrower/owner’s right to the property. The pros and cons of buying a home involved in foreclosure vary with the phase of foreclosure the property is in when purchased. The government agency can then fix up the home and offer low- to moderate-income families the opportunity to purchase qualified HUD-owned homes for a substantially reduced price. In some states, this information may be available 6 to 8 months or more before the sale.