How To Buy Foreclosure Houses And Bank Owned Real Estate

Buying foreclosure houses and bank owned real estate is a little different than purchasing newly

constructed homes or properties listed through realtors. Foreclosed properties are sold through public

auction, while bank owned homes are sold through banks or their assigned realty agents.

Foreclosure houses are often an attractive choice for first time home buyers and real estate investors

because they can be purchased below market value. However, the vast majority of foreclosed real

estate requires some level of repair, so it is imperative for buyers to engage in due diligence before

placing a bid on home.

It is also important for buyers to become educated about the process of buying houses through

foreclosure auctions. In most cases, attendees must register at least one day prior to attending the

event. Attendees must be prepared to submit full payment for house purchases within 24 hours of the

auction closing.

Foreclosure real estate can be viewed prior to the auction. Interested buyers should obtain a home

inspection and property appraisal to determine the current market value, along with repair estimates.

Bidding on properties sight-unseen can result in many unexpected expenses.

Unfortunately, it is not uncommon for evicted homeowners to inflict property damage. Although

unlawful, previous homeowners have been known to remove bathroom fixtures, kitchen appliances,

destroy flooring, rip out cabinets and countertops, or leave the home a filthy mess. Buyers should

plan on engaging in physical labor or allot finances to hire contractors to make repairs. However, with

a little work, foreclosure houses can make for a perfect residence or investment property.

It is a good idea to work with a realtor or real estate investor when purchasing foreclosure houses.

These professionals are familiar with the area and can provide buyers with comparable sales reports

to help them make appropriate auction bids. Realtors and investors can easily locate a variety of

foreclosure homes and offer suggestions for buying houses through public auctions.

Foreclosure specialists can tap into MLS listings which can save buyers time in trying to locate

distressed properties on their own. The Multiple Listing Service database is comprised of nationwide

home listings including foreclosures, bank owned properties and short sale real estate.

There are four ways to purchase foreclosure houses. The first involves submitting bids through public

auctions. The second involves buying preforeclosure properties directly from the homeowner. The

third option is to hire a real estate agent or investor to bid on foreclosure homes on your behalf, while

the fourth involves buying properties through investors.

Buyers must obtain prequalified lending prior to purchasing properties through auctions; unless

making a cash offer. Buyers must know their spending limits and have access to borrowed funds

once their bid is accepted. Prequalified financing is also required to buy bank owned homes.

Bank foreclosures are properties that did not sell through auction and are returned to the mortgage

lender. These properties are usually priced higher than homes sold at foreclosure auctions; however,

they are sold with a clean title. Also referred to as real estate owned, or REO homes, these houses

are sold through the bank's loss mitigation department or independent realtors assigned by the bank.

Buying foreclosure houses and bank owned real estate can offer substantial savings as long as

buyers do their homework. By taking time to become educated about the process, buyers can

potentially save several thousand dollars and obtain a great place to live. encina real estate