It’s a great deal and easier too, buying an auction house for your own is much more simpler than ever. “Advantages are plenty here in case of bank auction property buying processes”, says a Realtor with Freedom Realty Services in Midlothian, Virginia. It’s true you will need extra effort, patience and time to end up foreclosure deal without any failure. Here, you can have some guidelines are really useful if you are unaware of facts in buying bank owned homes.
Brief on Foreclosures:
Property owner has an option to resale his property under foreclosure process, if he is unable to satisfy his debt and this process is generally called as Foreclosures done by any bank or mortgage company or lien holder. Bank owned properties are sold out to pay off the debt of property owners and by this way they lost their ownership too. Once property is said to become a foreclosure, then there is no more rights to the previous property owner. Foreclosures affect the credit score of property owners who didn’t pay off their debt.
How to find foreclosures?
Few sources avail massive information about Foreclosed properties.
- Brokers or Real Estate Agents
- Mortgage brokers
- Few authorized government agencies
Important steps to buy a foreclosure house:
- Find an experienced Realtor: Use any medium to get contacts of any expertise agent or agency to have initial discussion. Scrutinize whether he is a certified person and CDPE – Certified Distressed Property Expert or SFR – Short Sales and Foreclosure Resource are the most common certifications which is must to become an expert in this field.
- Preapproval letter: When you go for loan or further credit option to fund for the foreclosure, a proper preapproval letter is set to be ready. It’s must to distinguish buyers from lookers and preapproval letter does and contains details about money that you are planning to borrow, credit score and income.
- Comparative Market Analysis – CMA: Have a proper discussion and aware of comparable market prices before you quote a right offer for Bank foreclosures. CMA is only effective from last 180 days and your agent evaluates more about tax assessment and further deep analysis about auction properties
- Bid relatively: it’s a disadvantage in bidding process that you will be clueless in quoting the price. With an expert’s idea, you will be able to cope up this process. But based on the location and property type, you will have an idea to bid and always bid high, if properties in particular area are moving faster than ever. However, research is must.
- Don’t expect bran-new homes: Bank owned homes are under no more supervision and is usually sold in “as-is” possession. Some small issues based on its structure or paint is always there. It’s in your hand to inspect all these issues before you own a property
There is a two way option, either you can go for cash or bank loan is however possible.
Three stages of Foreclosed Properties:
Foreclosed properties are undergoing three stages.
- Pre-foreclosure: A legal notice will be sent to the property owner against his ownership, if he fails to repay his debts more than three times.
- Foreclosure Auctions: Foreclosure Auctions are done when property owner can’t contend to hang on to his property. Highest bidder who wins the bidding process probably has to pay in single hand and there’s no more time to research about the property and he has to take risks at any time after that.
- Foreclosed property: Patience is must for anyone after owning a foreclosure, since it’s a hard time for changing title and for doing necessary repairs. Immediate movement is anyway not possible here in this custom.