Buying Foreclosures In A Real Estate Recession
Across the country, Americans are watching the recession fall before
their eyes. Itís getting harder and harder for people to pay their
mortgages and as a result, the number of foreclosures is increasing.
The residential real estate market effects the entire country. When
it crashes, it is just like the stock market crashing. Everyone is
effected. The only people who do well are bankruptcy and divorce
lawyers and doctors, who are always needed. Car repair shops tend to
also do better in a down economy as people strive to fix old cars
instead of buying new ones. Everyone else gets hit really hard. The
collapse of the residential real estate economy triggers a domino
effect and the dominos are already starting to fall down.
You can count on seeing a lot more foreclosures on the market.
Foreclosures are usually located in blighted areas during times when
the market is prospering. Now you can see foreclosures just about
anywhere, even in upscale neighborhoods. A foreclosure occurs when
the owner of the property is unable to pay their mortgage and the
bank takes over the property. The owner is evicted and the bank or
lender sells the property to someone who will cover the cost of any
debt due. Banks and mortgage lenders do not want to hang onto the
properties so they are willing to let them go as long as they get
any monies they put out for the mortgage.
Buying foreclosed property is not difficult. You have to have cash
ready as well as a certified check for the down payment. You have to
be able to prove that you can afford to finance the house so you
will have to either show proof that you have the money for a cash
sale or a pre-approval letter from a mortgage company. You will also
bid on the property along with other people. You should not be
discouraged if you get turned down. If you continue bidding on
foreclosures, you will eventually get a property and you can then
fix it up and rent it out to a tenant. You can hold onto the
property until the residential real estate market changes and it
becomes a sellers market. This will be noted when the demand for
housing is greater than the supply and will cause the value of the
homes in your area to rise considerably.
You can find a list of properties in foreclosure in your local
county courthouse. This process has to go through the court system.
An owner must be evicted by the sheriff and the sale of the property
must be public knowledge. Anything that goes through the court
system is kept in record.
Real estate agents have a list of homes in foreclosure. These are
owned by banks and lenders and this information is also of public
record. If you are dealing with a real estate agent, they should be
able to show you the homes in your area that are in foreclosure. Be
advised that these homes have already been looked at by savvy
investors before they came on the market and make a better long term
investment, or a home in which you plan to live, than a home that
can be fixed and sold quickly.
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