Great Bargains With Foreclosures In Luxury Communities

Great Bargains With Foreclosures In Luxury Communities

Despite the bad press foreclosures are receiving lately on the news due to banks and lenders sloppy documentation, the number of new foreclosures is still at a high.

While some have rumored a freeze on foreclosures, according to "The Hill" on October 11, 2010, Freddie Mac has not called for a moratorium on foreclosures and probably won't do so. What they have done is began investigations into banks and their documentation problems.

What does this mean for the average citizen? For those who can't afford their homes, it doesn't mean a whole lot. These homeowners are still hitting walls trying to modify their loans. When that doesn't work, they have to face the process required in foreclosing.

For the buyer, this means lower home prices. In luxury communities such as Sedona, Arizona where home prices only go up, this means right now it a great time to get the bargain of the century.

Let's begin by explaining what a foreclosure is before we talk about bargains. Foreclosures are often confused with short sales. So, this is what a foreclosure is how it occurs.

A home goes into foreclosure when a lending institute takes back ownership of a property that it carries a lien on. This taking back is usually done when the borrower is not making payments. The process a lending institute follows begins with the borrower receiving notice. If the borrower does nothing, the property is sent to a trustee sale or public auction. Few homes are sold at these auctions, possibly due to the fact that the bank is starting the auction price at the loan amount. With many homes upside down, this doesn't give the buyer any real discounted value.

After the auction, if the property has not sold, it will then be listed on the MLS, just as a normal listing would and under a realtor. The difference between a foreclosed MLS listing and a standard listing is that in addition to one having to fill out a standard sales contract, there is an addendum that is included by the lending institute. The addendum should be carefully read and understood as it can take away the rights a buyer would have in a standard contract. Addendums usually include statements such as - buyer is buying house as is'. Buying a home as is' almost nullifies the value of an inspection report. If an inspector determines the house is in need of repair, the bank can insist that it will not make any.

The addendum can also include the right for the lender or bank to cancel the contract at any point before Close of Escrow if a better offer comes in.

Now, if you are willing to accept these conditions, then buying a foreclosure in a high-end luxury community can be one of the best investments you can make right now. With that said, know that other folks also know that buying foreclosures in such communities is a great investment and will make counter-offers to your offer on a foreclosure. But with an experienced professional realtor on your side, someone who knows the surrounding area and its pricing, they can assist you in not over-bidding on your home.

Buying a foreclosure doesn't have to be daunting or difficult. Do your homework, speak to a professional realtor and be prepared to have some patience - and with that, you too can walk away with the home of your dreams in the community of your dreams within your price range.

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