According to a report released recently, foreclosures in Dallas and Fort Worth areas in August, 2008 have risen by more than 35% as compared to August, 2007. With foreclosures on the rise, and the declining prices of homes, people are increasingly looking at buying homes that are involved in foreclosures (since they traditionally sell for lesser than other homes in the same neighborhood).
There are a large number of options when it comes to homes involved in foreclosures. The internet is a good place to start your search. You can search for homes in specific localities with specific budgets. A number of web sites that offer these lists are present and the ones that carry comprehensive lists tend to charge a small subscription fee. Lists of foreclosure homes also appear in newsletters and newspapers. Besides, you could also get in touch with real estate agents and lending institutions to get lists of foreclosure homes.
A home goes through different stages of foreclosure. During the pre foreclosure stage, you can buy a home directly from the home owner. A home owner would generally want to sell the house so that the amount that is remaining on the home loan can be paid off. Since the primary concern of a home owner selling a home during foreclosure is to get enough money to pay back the lender, buying a home during pre foreclosure can throw up some very good deals. However, one thing that should be kept in mind is that any existing secondary lien or unpaid tax would become the new home owner’s liability after the deal goes through. Therefore, existing arrears should be looked into, and should play a role in deciding what a good price for the home should be.
After the house is foreclosed upon, it is first put up for sale at a public auction that generally takes place at a courthouse. These homes are not open to inspection before the auction, thereby putting a certain element of risk into the process. Availability of ready funds to buy a house at an auction does tend to reduce competition though. If you do not have it in you to put in a fair amount of time and effort into the process, auctions are best left to the experts.
If a home does not sell at the auction, the title is passed on to the lender. Buying through a lender is considered a safe option because you can inspect the property. You don’t have to worry about arrears on the property because they are normally taken care of by the lender after the foreclosure proceedings. Also, since all lenders are often in a hurry to sell the homes they have on their inventory, they are known to offer substantial discounts.
Irrespective of the stage you wish to buy a foreclosure home in, patience is the key, as homes that are seen first are very rarely bought.
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