Foreclosure property is quickly becoming one of the most popular types of real estate investment. In today's recessed housing market, there are literally millions of foreclosure properties available. While vacant land and commercial properties can fall into foreclosure; residential homes are the more popular choice for real estate investors.
Foreclosure property is generally sold below market value. Once a home is foreclosed, it is placed for sale through auction. If the property does not sell at auction, it is returned to the bank and becomes real estate owned (REO).
Many investors prefer to purchase bank foreclosures over foreclosure homes sold through auction. When foreclosed properties are returned to the bank they no longer have a mortgage attached. Any creditor or tax liens are removed and the property is sold with a clean title. However, REO houses are usually priced higher than homes sold through foreclosure auctions.
Although bank owned properties usually have a higher price tag than auction foreclosures, they are usually a better deal. The major drawback to purchasing REO homes usually stems from the fact that these properties must be purchased through the bank's loss mitigation department.
Most banks hire loss mitigators to handle foreclosure properties and short sale transactions. One of the primary duties of loss mitigators is to obtain as much money for distressed properties as possible. After all, the bank is in business to turn a profit. In most cases, investors must engage in multiple counter offers to obtain the price they desire.
Purchasing foreclosure property can be rewarding and profitable. However, it is important to engage in due diligence and determine the true cost of the property. The goal of purchasing foreclosure and bank owned real estate is to buy real estate significantly under market value. If the property requires extensive renovations, costs can quickly add up and deplete potential profits.
Real estate experts advise buyers to obtain comparable pricing of houses sold in the area during the past six months. This information can be obtained through Realtors or by conducting research online. When you locate a foreclosure property of interest, obtain a professional inspection and real estate appraisal. It's important to realize most foreclosed property is sold "as-is". Repairs and renovation expenses are the responsibility of the buyer.
Investing in foreclosure property can be risky. However, it can also lead to substantial profits over the long run. By investing in foreclosure property today, you can benefit from reduced prices and interest rates. Should you decide to wait until the real estate market rebounds, chances are the deals won't be nearly as lucrative.
Only you can decide if foreclosure property is the ideal investment option for you. We invite you to learn more about investing in a distressed real estate market by visiting our comprehensive foreclosure property article library. New articles are added each week and cover a wide range of investment and financial topics. Please take a moment to bookmark SimonVolkov.com and stop by often.
Last, but not least, if you are currently facing foreclosure contact Simon Volkov today. As a private real estate investor, Simon specializes in helping people liquidate real estate quickly. Chances are he can offer you a solution you may not know existed