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With the NATIONAL ASSOCIATION OF REALTORS® estimating
that over 1 million homes will end up in foreclosure during the next couple
of years, prospective buyers might view the situation
as a means of snapping up a residence at a bargain price. However, experts
note that foreclosure sales can be dicey, with the riskiest deals involving
homes
purchased at auction. While this format offers the
greatest chance of a deep discount, buyers must provide payment at the time
of the sale,
making a deal without having the property inspected or
an assurance that the current residents will vacate the premises. Once the
bank takes
possession of homes not sold at auction, buyers can
purchase directly from them in a real estate owned (REO) transaction. While
inspections and title insurance are possible, buyers are not likely to
receive
tremendous discounts or get lenders to respond in a
timely manner to their offers under these circumstance.
Those who scan public default notices and approach
struggling home owners to inquire about purchasing a dwellings before it
ends up in foreclosure assume the least amount of risk; and in most
instances, they
need only offer more than the mortgage balance but
less than the market value to secure the sale. However, with large
inventories of new homes in some markets providing leverages to those in the
market for a
property, buyers may not need to focus on foreclosures
to get a good deal.
Source: USA Today, Christine Dugas |
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