subject: Foreclosure Properties...How to Invest Wisely [print this page] Foreclosure Properties...How to Invest Wisely
In today's market, finding foreclosure homes is not abstruse. Foreclosure homes can be extreme business investments, especially if one is able to obtain a house below market value then gain immediate equity upon finishing of the purchase.
Short sales do not present as much risk as other options; However, less return is attained. When a bank consents that the home owner may sell the home for a lesser amount than is owed to the bank by way of avoiding a foreclosure, the outcome is a short sale. In other words, lien holders agree to take a short payoff. One negative feature of this kind of sale includes that buyers will have to tolerate waiting, and this sort of sale is generally not concluded for many months. Also, there is a likelihood the bank may not give approval in the end. Estimates show that one out of three short sales close. Those that do not close typically end up in auction.
At public trustee or sheriff auctions, the bank bids less than is owed. This enables the backer to acquire a property at far less than market value, leading to high profit margins. These sales typically can be "flipped", or re-sold, at market value. Buyers have to be able to purchase in cash, having certified funds on hand for the entire amount of the property. The day before the auction, bids by the mortgage holder are posted. This allows a short time frame to study the property. Auction properties are sold "as-is". Because of this, the buyer becomes responsible for any structural problems and attached taxes or liens.
Foreclosure acquisitions that carry the shortest risk are real estate-owned or bank-owned properties. The purchase of this kind of home permits for an inspection term on the buyer's end. If the state of the property does not meet the expectation of the buyer, the investor is able to cancel the purchase. Titles are gained free and clear from these purchases. Money saved over market value is less in this kind of sale and the standard investors may save is five to fifteen percent.
The single biggest answer with foreclosures is that they are definately not for everyone. This is a very good option for investors looking for more rental properties but if you are looking for your dream home that you will occupy, you may want to keep looking. Foreclosures can take a long time to get closed. Banks move at a very slow pace. One would almost think that they really do not want to actually sell the home. If they were truely interested then the ability to move quickly would be a real virtue. Short sells are much more friendly to work with. They can often get to the closing table in just a few months unlike foreclosures that can take up to 6 months to close.
Pros and cons are present in all forms of foreclosure investments. Investors should re-check figures and carry out research on properties to flourish. On the large, however, foreclosures may be a rewarding investment opportunity. For more information on homes for sale in Carrollton Texas visit our website at http://www.joyricerealtygroup.com/.
