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.
Here are some advantages to purchasing a foreclosed or pre-foreclosed home:
- 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.
- The selection range of home available to choose from is extensive.
- No Realtors to have to go through or agency fees to pay (although you should still get advice from someone who knows something about real estate).
- Insurance is optional. Results in additional monthly savings.
- Landlord or resell venture opportunities.
- Less risky than trading equities in the stock market.
Disadvantages:
- A mortgage could be hard to obtain, unless you have borrowing leverage
- Need to be mindful of existing liens or taxes that have not been paid on the property.
The main caution is to properly check that the property is free and clear of any debt ahead of time. Also know in advance when the government auction expects payment for the house and have the loan details worked out with your bank. As with purchasing any house if you have enough cash handy (who does) that makes your profit potential much greater.
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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