Buying A Home – Is A Foreclosure Right For You?
If you’re considering buying a home through a small sale or in foreclosure, you’ll find the foreclosure process more challenging. A foreclosure happens when a homeowner can’t afford to pay his monthly mortgage payments and the lender decides to take legal action to force the sale of the home. With today’s disaster in the bank and mortgage industry, you’ll find more competition from bargain hungry homebuyers. You’ll learn foreclosure abound in every market, from luxury homes to the simple inexpensive ones.
A foreclosure proceeding happens over a specified period of time – the homeowner is first given an opportunity to resolve the delinquent loan. Once the bank has chose to assert their foreclosure rights, a homebuyer can take advantage of purchasing the home during three phases: 1) Pre-foreclosure, 2) At the public sale or auction, and 3) Directly from the bank after the foreclosure (called real-estate-owned or REO).
What makes buying a foreclosure so well loved is the low price you get no matter which stage of the process you choose to buy. While there are positive aspects to buying a home in foreclosure, you need to be aware of certain drawbacks:
1) Minimum Buyer Protection – Unlike a normal homebuying transaction, a foreclosure process will force you to sacrifice some homebuying protection. For example, you may not get the opportunity to inspect a home before you buy it and have to forgo any protection from title insurance.
2) How Long Is The Owner Protected – You’ll find most states have laws protecting the delinquent homeowner from having their home ripped away on a moment’s notice by an unscrupulous bank. As a buyer, that means you’re faced with deadlines, unplanned delays, abiding by court rulings, and an uncertain future – especially in those states where the defaulted owner has the ability to “redeem” or buy back the property following a foreclosure sale (usually within 10 days to one year). If those unfortunate circumstances should happen to you, your money will be refunded. It’s vital for you to seriously consider whether you want to wait indefinitely for a home you may not be able to occupy.
3) Professional Competition – Word gets out when there’s a fantastic real estate deal so expect to see plenty of investors trying to bid on a property.
4) Hidden Risks or Issues With The Property – Unfortunately, owners in foreclosure tend to cut out spending on property maintenance, property taxes, or liened up any remaining equity to secure other debts.
If you still choose to buy a home in foreclosure, it’s vital to have an experienced Realtor help you through the process. Make sure the agent specializes in them. Only certain Realtors will specifically handle a foreclosure. If you choose to have a regular agent working for you, make sure to delineate each agent’s role, so there’s no confusion. You may also consider hiring a real estate attorney to help you steer through the maze of steps.
Want to find out more about Anaheim homes for sale, then visit this directory to choose the best Anaheim Realtors for your needs.