Daily Real
Estate News | April 2, 2007
Buying
Foreclosed Properties Can Be Risky
With the
NATIONAL ASSOCIATION OF REALTORS® estimating that over 1 million
homes will end up in foreclosure during the next couple of
years, prospective buyers might view the situation as a means of
snapping up a residence at a bargain price.
However, experts note that
foreclosure sales can be dicey, with the riskiest deals
involving homes purchased at auction. While this format offers
the greatest chance of a deep discount, buyers must provide
payment at the time of the sale, making a deal without having
the property inspected or an assurance that the current
residents will vacate the premises.
Once the bank takes possession of
homes not sold at auction, buyers can purchase directly from
them in a real estate owned (REO) transaction.
While inspections and title
insurance are possible, buyers are not likely to receive
tremendous discounts or get lenders to respond in a timely
manner to their offers under these circumstance.
Those who scan public default
notices and approach struggling home owners to inquire about
purchasing a dwelling before it ends up in foreclosure assume
the least amount of risk, experts say. And in most instances,
they need only offer more than the mortgage balance but less
than the market value to secure the sale.
However, with large inventories of
new homes in some markets providing leverages to those in the
market for a property, buyers may not need to focus on
foreclosures to get a good deal.
Source: USA
Today, Christine Dugas (03/30/07)
©
Copyright 2007
