Last year was a big year in the real estate market, with over 5 million home sales recorded. The trend is expected to continue, making it a very competitive time to buy a home in most areas. This has led many people to explore alternative options outside of the regular home-buying process.
If you’re on the home search, you might have seen foreclosed homes. So what is a home foreclosure and how do you buy a foreclosed home? Learn more about it with this handy guide here.
What Is a Home Foreclosure?
If you were wondering what happens when a home is in foreclosure, here’s the lowdown. When a home goes into foreclosure, it means that the mortgage holder cannot make the payments. The bank or the lienholder then seizes the home and puts it on the market for sale so that they can recoup the amount owed.
What Is a Pre-foreclosure Home?
Pre-foreclosure is the first step in the foreclosure process which gives the mortgage holder notice that the bank or lienholder will be pursuing legal action due to missed payments. Before they can go beyond this stage, they will need approval from the court. This time period allows for homeowners to explore options, like negotiating or selling the property.
How Do You Buy a Foreclosed House?
Once you’ve decided to look at foreclosed homes for sale, you can try a few different avenues to find them. If you have a real estate broker, you can ask them to look on your behalf, or you can check online sites that have foreclosures listed for different entities. Finally, you can also search for local auctions to attend where properties are auctioned off.
While it may be tempting to invest in a foreclosed home because of a bargain-basement price tag it does come with some risk. If you buy a property at auction, you may not be able to have an inspection first. There might be issues that you are not aware of that could result in significant costs.
Cash for Homes
There are many companies out there that will buy pre-foreclosure homes for cash, and help avoid the home foreclosure process. This is also a good solution for sellers who don’t want to pay a real estate broker’s fee and closing costs. If this sounds like something you might be interested in, check out how here.
Ready To Buy a Home?
Now that you’ve learned what is a home foreclosure you can make an informed decision whether it is something you want to pursue in home sales. This can be an attractive route for potential buyers who would like to find a good deal outside of the regular market. But it’s important to do your due diligence about the property first since it doesn’t follow the traditional buying and selling process.
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