BUYING A HOME IN FORECLOSURE

Are you thinking about buying a home in foreclosure? Does this describe you? You've wanted to buy a home but sat by watching the incredible price run-ups in 2004 and 2005. The biggest question is: Will you ever be able to buy a home? Will prices ever come back down?

Now we know the answer. Yes! Prices have recently come back down to earth. Rates are down in an effort to stimulate the economy. Many homes all over the country are in foreclosure as a result of the so-called boom times where prices were artificially high and rates were artificially low.

There are a number of ways to reap the rewards of the buyer's market we're experiencing in real estate today and create wealth investing in all stages of foreclosure.

• You can focus on homes in some stage of foreclosure. Buying homes that are in preforeclosure, are being auctioned, or are already owned by the lender has its pitfalls, but can also provide the greatest rewards.
  
  
  • Investing in pre foreclosures runs the risk of submitting an offer for less than what's owed, only to have the offer rejected by the lender after waiting, possibly for months, for an answer. Buying a pre foreclosure sale home can give great rewards if accepted.
    
    
  • Buying at foreclosure auctions has different pitfalls, but also has the possibility of providing a great deal. The biggest risk is that you, as the buyer, cannot inspect the house prior to the auction and you must be prepared to present cash or a cashier's check for at least 10% of the purchase price at the auction.
    
    
  • If the lender has repossessed a home after the auction, they now have to sell it to remove it from their REO (Real Estate Owned) inventory. One of your best buying opportunities is to buy after foreclosure. It is very costly and unprofitable for a lender to hold a real estate portfolio. These homes need maintenance, repairs, taxes and insurance to be paid, etc. Additionally, money which could otherwise be lent out at a profit is tied up in a non-performing asset. These homes will most often be listed for sale in the Multiple Listing Service (MLS)by a Realtor® selected by the lender. To find the very best contact a Realtor® who is familiar with the foreclosure market.

Buying a home in foreclosure can be risky, time consuming, but profitable.

If you want more information on whether you really should try to save your home you can find out here.