Sheriff Auctions - Golden Opportunity for Homebuyers
Sheriff Auctions – A Golden Home Buying Opportunity
In some of the states in the US, the sale of foreclosed properties is known as Sheriff Auctions, a name derived from the fact that the local sheriff conduct and manage these auctions. The minimum bid price on these properties is pegged quiet low for adding to their attractiveness for small investors.
What is foreclosure of properties?
Foreclosure is a legal process in which, in case a borrower defaults on his/her mortgage loan, the lender gets the right to acquire the collateral property. Subsequently, the lender puts up the property for auction sale to recover the amount due.
Important points related to sheriff auctions
Screening. Investment in property being a big decision, before taking the plunge, it is important to chart out your fundamental requirements. This exercise is necessary before scanning the databases of available foreclosure properties.
Manual Inspection. Sometimes, the custodians of the foreclosed houses compromise on their repairs and maintenance. A personal visit to the site can bring into light any such issues.
Reclamation Clause. At times, the legal terms of the foreclosure agreement contain a reclamation or redemption clause. Under such clause, the defaulter can acquire back the foreclosed property after repaying the auction amount (including interest) to the auction buyer.
Expert Advice. Be extra particular about availing the services of a legal expert for buying foreclosed properties. The laws related to such transactions are much more complex than those applicable on other property deals are. In addition, different states have different sets of rules regulations and governing laws with respect to such auction sales.
Benefits of buying the Foreclosure Houses
Discounts. Discounts often remain the single most important factor governing the decision to choose a particular foreclosed property. The focus of such sales is the recovery of the amount in default. Therefore, the auctioneers do not concentrate in commanding the best price for the property.
Foreclosure Prevention Act of 2008. The Government has come up with various incentives to drive the property market. One of the most significant of them is the provision of tax credit. The tax credit provision allows a tax credit of $7,500, spread over a period of two financial years. This credit is repayable over a period of 15 years.
Payoffs. The subsequent foreclosures for sale promise huge payoffs on the account of price appreciation, partially driven by Government incentives and original discount availed.