Houses for sale in the foreclosure market come about because of the inability of the home owner to make mortgage payments. This process, if finalized is very damaging to a credit history and will prevent that home owner from purchasing on credit for quite some time.
The lender forecloses on a property when the home owner has failed to make three consecutive payments; this process takes anything from sixty days in some states to two years in others. Not only that, once the foreclosed property has been sold at auction the lender is able to obtain a default judgment to cover any further outstanding losses they incurred on sale of the property.
Houses for sale in the foreclosure market have increased by 72% since the year 2005, at present the real estate market is in a crisis. Much like many other financial markets! This makes it more simple than ever for investors and home buyers to purchase houses for sale in the foreclosure market. It does not take and experienced investor to take advantage of the present buyers market, there are a glut of foreclosure houses for sale presently. Both government owned, and lender or bank owned.
The three methods of buying foreclosure houses for sale include in the pre-foreclosure phase. This is a more difficult process and the investor has to really do their homework. It means finding out where houses for sale in pre-foreclosure are (generally a county courthouse search will accomplish this), trying to negotiate with a home owner (often very difficult to do), finding out what liens are on the property, inspecting the premises, and calculating all costs in order to make and offer to the lender and lien holders as well as the owner. The owner can negotiate a short sale with their lender in this phase and if they have done so, finding a willing buyer would be to their benefit. By running an ad which reads “Houses Bought for Cash”, might be a way to draw prospective pre-foreclosure house owners to your notice.
The second method is the foreclosure of the mortgage where the houses for sale go on auction. Many are purchased by the lender and become their property, many are bought by investors. Purchasing houses for sale during the auction phase also required the same amount of preparation as purchasing in the pre-foreclosures phase.
The third method is buying houses for sale one they have been foreclosed and auction and are the property of the bank. This is easiest method of purchasing houses for sale in this market as all the preparation has been done for you. It is also the least risky, particularly for a new investor, and some bargains in this market can be found.
Regardless of which method you want to use to purchase houses for sale in the foreclosure market, preparation, research and education are key to success. Do your homework and find out everything you can regarding the property and you just might find yourself with a beautiful home on your hands.