subject: Minnesota Foreclosures: How You Can Obtain A Property Below Market Value. [print this page] A couple of years ago, foreclosures were few and far between. With the economic downturn, this has become a household word all over America, including Minnesota. Minnesota foreclosures are happening on a regular basis nowadays. It's a nightmare for homeowners in arrears with their monthly payments and a buyers' market for property investors.
Often when a lender loses his job or his business goes bankrupt, he is unable to pay the monthly installments on his home loan with the bank. If you are one of those unlucky enough to be in such a situation, you should do everything you can to keep your house from being repossessed.
At the moment the banks have a huge number of repossessed houses on their books, so they are not very eager to repossess any property right now. They will therefore do everything reasonable to give the home owner an opportunity to bring his arrears payments up to date. If the person involved is without a job or his business has failed, he might not be able to meet the monthly payments regardless of how much he wants to. In this case the banks will repossess the property.
There are legal formalities to be followed before this can happen. They will normally give you a final demand to pay the arrears amount within a certain period of time. If you are not able to do this, they will then proceed with the foreclosure action.
An auction is a common way in which banks dispose of such repossessed properties. If you look in your local Minnesota papers, you will no doubt see various advertisements for upcoming auctions where one or more of these properties will be sold.
If you are fortunate enough to either have the cash to buy a property or be highly credit worthy with your bank, you will be in a position to buy a house or other property at one of these auctions at a price significantly below market value.
You can discuss this with the bank before the auction and get pre-approved for a certain amount. This way you can bid with confidence, knowing that the funds will be available. Just don't let your emotions run away with you at one of these auctions and end up paying much more than the property is worth.
The property on sale should be available to view before the auction date. It's imperative that you first visit the location and look out for any defects that might be very expensive to fix. Sometimes an owner would neglect a property once he realizes that he is going to lose it.
Specifically look at the condition of the paintwork, carpets, garden, roof, woodwork, electrical system and plumbing. A leaking roof can cost thousands to fix. Watch out for signs of this on the ceiling and carpets.
When you bid on one of these Minnesota foreclosures at an auction, make sure that you know the general price level of properties in the area. Auctioneers are not in the game of explaining pitfalls to you; it's up to you to do your homework about the popularity or not of the neighborhood.
