I’m know you’re in tune to the worries of recession and the real estate crisis going on in the US. This has caused a flooding of foreclosures that is surpassing previous highs. Although you still see older foreclosed homes in run down areas, what’s different during this crisis is the quality of forclosed homes and neighborhoods they reside have drastically improved. Even some of the nice estates in wealthy neighborhoods can be found at government auctions for prices much lower than market value.
The timing for researching on a great deal for a new house couldn’t be better then it currently is, but first you should be aware on the pros and cons of purchasing homes through a government auctions as compared to the standard way using a realtor.
Some of the pros of purchasing a foreclosed/pre-foreclosed home are:
- The great prices available on foreclosed/pre-foreclosed homes is obviously the number one advantage.
- Many homes are in good condition for much less than their market value.
- Variety and selection is better then it has ever been.
- No realtors or agencies fees to pay (consulting with a real estate savvy person is recommended).
- Some insurances are optional. It could save you hundreds a month.
- Landlord or resell venture opportunities.
- Less risky then the stock market, as you own something tangible
Disadvantages:
- Mortgages may be harder to get (unless you have great credit with your bank).
- You need to be aware of any existing liens, judgements, or unpaid taxes still on the property.
Making sure that the foreclosed home you’re interested in is clear of all debt is one of the most important things you should do homework on. After that, find out what types of payment plans are allowed, and have any required financing in place beforehand. Obviously any additional savings you may have will help.
Government auctions are being held regularly across North America. Check the Internet to discover information on the upcoming auctions and the property listings at each auction. Many sites will display images of properties that are in pre-foreclosure (properties you can purchase before the auction) and that will be each particular auction. Buying a foreclosed home through a government auction can be a very rewarding experience, but make sure you do your research first. You may wish to just watch during your first visit to a government auction to gain experience and get an idea of the procedure used.
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