Repo houses are houses that have been repossessed because the borrower fails to pay back a loan. The lender will foreclose the property and list it with agents to have it sold as fast as possible, because the lender has no use for real estate. You can find lists of repo houses for sale at real estate agents, local newspapers and classified, banks’ websites such as the U.S. Bank website and the HSBC Bank website, and the HUD website, which lists houses repossessed by the government. Those listed on the HUD website are called HUD homes and the processes of buying one is slightly different from buying other repo houses as preference is given to owner-occupiers.

When buying a repo house, it is even more crucial to investigate the property well, because it will be sold as is. You will generally not be given the opportunity to talk to the previous owners, and therefore it may be harder to spot some problem areas. You should visit the property with a solicitor or surveyor, and get an estimate of how much it would cost you to carry out any repairs that need to be done. Repo houses are sometimes left vacant for a long time, and generally damages increase with length of vacancy. Sometimes repo houses are vandalised by the previous owners, as not many people are too happy when they are asked to leave their property. Make sure that the previous tenants have left the property, or else you may be responsible for their eviction.

Repo houses for sale are an opportunity for investors. Many buy cheap repo houses, spend a few weeks renovating them and then sell them at a much higher price. The profitability of such venture depends on how much the combined price and repair costs, and the current demand for houses in that particular area.

Should you buy a repo house? Buying a repo house carried potential risks and hassles, however, if you do your research properly and get advice from experienced agents, surveyors and solicitors, you can get some very good deals and you can get a house for much lower than what you’d normally pay.

Repo Houses For Sale is a post from: Buying Foreclosed Homes

Repo Houses For Sale is from Buying Foreclosed Homes

Such short sale homes present a unique opportunity for home buyers and investors because property at short sale is generally priced below market value to encourage a quick sale. Discounts between 10 to 30 percent are common, and significantly higher discounts are not unheard of. Before making an offer on a short sale home, there are a few things you need to consider. First of all, do your research. Find who is in title, and whether a notice of foreclosure has been filed. Visit the house and look around for faults and repairs that will need to be made. Buying a short sale home is better than buying a foreclosed one, because you will have the chance to speak directly to the owners. However, this does not mean you do not have to do your own homework.  Consider the neighbourhood and any adjacent houses. Get an experienced short sale agent to help you with the negotiations.

If the seller accepts your offer, your next step is to send the agreement letter to the lender as it needs to be approved by the latter for it to be made formal. You will also need to prove that you can indeed finance the sale, either because you have the money or through a loan. As the lenders are usually banks or the government, it can take some time before the whole process goes through, and waiting times of a few months are common. Also make sure that you agree beforehand who is paying for the commissions involved – usually it is the lender who pays for broker and agent fees.

Be aware that short sale homes are sold as is, without any warranty of their condition. It will be up to you to pay for all the repairs required, pest control and maintenance needed. It is therefore important that you estimate the cost of these before agreeing for a sale, as when these are added up the price may not look so cheap after all.

Short Sale Homes is a post from: Buying Foreclosed Homes

Short Sale Homes is from Buying Foreclosed Homes

Once a property is scheduled for auction, there will usually be a one month waiting time between the notice of auction and the auction event. During this time you should research the property well and inspect it from the inside if possible. Next you should make sure you know about the legal implications and requirements of the auction – this will vary from state to state. Most states require that if you are the winning bidder, you pay 10 percent of the price at auction day and the remaining balance within one month. Other states require you to pay the full amount on auction day either as cash or with a cashier’s check.

The opening bid will be based on the amount owed to the lender. If no one bids above this amount, the property will go to the foreclosing lender. Note that if there are unpaid liens on the property, the winning bidder may be responsible for paying these – check this beforehand.

If you feel the property is a bargain, place a bid. When determining how much to bid, keep in mind your financial abilities as well as how much the repairs will cost you. You may need to take a loan but be careful that you can actually pay it back. Place a limit to how much you’ll be willing to bid on auction day – it is easy to get carried away by the auction atmosphere. Remember that a bid is legally binding. If you are new to the auction process, it may be a good idea to take your solicitor with you to bid on your behalf.

If you are the winning bidder, you will have to pay the deposit or full amount (according to state laws) on auction day. Make sure you get the relevant documents from the auctioneer to verify that you are the winning bidder. Check what needs to be done before you can claim ownership on the property. Waiting times for taking possession of the property vary from hours to months following the auction. Some states offer the previous owners a chance to buy back their property – if this is the case do not spend any money on the property until this period is past.

Foreclosure Auction Process is a post from: Buying Foreclosed Homes

Foreclosure Auction Process is from Buying Foreclosed Homes

Whatever the origin of government owned homes, the process of buying one is the same. When the government will seize control of the home, it will try to sell it off in a quick sale, as the government has little use for vacant houses. To achieve this, a lower price is placed on the home.

To buy a government owned home, you are required to do so through a licensed real estate broker. These are licensed to sell the government owned properties, and they will earn about 6 percent commission on successful sale. As a result, it is in their best interest to sell you the property, and therefore you shouldn’t rely solely on them when making a decision. You should visit the government owned home yourself and estimate the expenses that will need to be carried out. Add the price of all repairs and maintenance to the price of the home, and only then you can have an idea of whether the price is a deal or not. If you are unsure about cost of repairs, take a surveyor or a home inspector with you.

Note that all repairs that need to be done will have to be paid by you as the foreclosed homes are sold as is. The only exception is that the HUD will carry out those repairs that are deemed to be a safety issue. In addition, when buying an HUD home, a loan program (FHA 203K) is available to help finance the refurbishment of the property. Special schemes are available to lower income citizens aged 62 and over to help with improvements of their home, including the making of the property accessible to the handicapped. If you are looking at buying a VA home, you may be eligible for help with financing through programs such as the BAC Home Loan Servicing and the VA Vendee Financing scheme.

Lists of government owned homes can be found on the Department of Housing and Urban Development website (www.hud.gov), local real estate agents licensed by the HUD, and some local newspapers. Some independent websites also carry lists of government owned homes, but these are not always free.

Government Owned Homes is a post from: Buying Foreclosed Homes

Government Owned Homes is from Buying Foreclosed Homes

There are two main options for the owner during pre foreclosure – either pay off the default or sell the house. Some owners choose to take out a personal loan to pay off the default, but this needs to be done with care as it can just aggravate the person’s financial situation. The other option is selling the house. This is often a better option than waiting until the foreclosure period, when the lender will sell the property for a price that is often lower than what the person can negotiate for during pre foreclosure. In addition, selling the house in pre foreclosure and using the money to pay off the default will avoid a bad credit score.

Prices of pre foreclosure homes are generally still lower than normal market value, as the owner has a limited time during which to sell the house. However, this is a more favourable situation than waiting until foreclosure when the property will be seized by the lender.

If you are looking at buying a house, buying a pre foreclosed one has several advantages over buying a foreclosed one. Yes, the price may be higher than what the house may sell for during foreclosure, but pre foreclosure homes are generally in a better state because they have not been vacant for a long time. They are less likely to get vandalised and you will have the opportunity to talk to the owners to learn more about the house. Moreover, because you are dealing with the owners directly, you stand more chances of negotiating and haggling for a good deal. Once the property gets to foreclosure stage, it is usually take it or leave it as is.

As with foreclosed homes, you should carry out your own research before submitting an offer, and make sure you inspect the property thoroughly. Get professional advice if you are new to the real estate market.

Pre Foreclosure is a post from: Buying Foreclosed Homes

Pre Foreclosure is from Buying Foreclosed Homes

The first step in buying a foreclosed home is finding one to suits your needs. If you plan to live in it, consider what you want for your family. How many bathrooms and bedrooms do you need? Is it close enough to workplaces, schools and shops? Do you require a garage? Pool? Games room? If you are an investor and plan to flip the house, consider the re-seller potential of the house after refurbishment. What’s the demand for that kind of property in that kind of location?

Next, you should have a fixed budget in mind and do not get carried away by what looks like a superb deal. If you need to take a loan, shop around different banks to find the best deals. If you are buying a foreclosed home at an auction, you will generally be required to pay ten percent of the price on that day and the remaining sum within one month, so make sure you do the necessary arrangements.

Before making an offer on the house, you should go and inspect it yourself, or even better, get a professional home inspector to come with you. Foreclosed homes tend to require a considerable degree of repair, so you need to be well aware of the extent of these required. Remember that foreclosed homes are sold as is and without any warranty of condition. With foreclosed homes, you won’t have any opportunity to talk with the previous owners regarding issues or recurrent problems, but you can gain some information by talking to the neighbours.

Once you have decided you like the house, you will either attend an auction or submit an offer via an agent. If the house is being sold at an auction, it is a good idea to take your solicitor with you, especially if you have no previous experience with home auctions.

When buying a foreclosed home, there is much less haggling involved compared to buying a regular house, and generally it is take it or leave it. However, if the property has been unsold for some time, you may have more chance to negotiate. One final point about buying a foreclosed home: the laws governing the process vary from state to state, so check with a legal advisor before committing to a sale.

How Do You Buy A Foreclosed Home is a post from: Buying Foreclosed Homes

How Do You Buy A Foreclosed Home is from Buying Foreclosed Homes

You can find such cheap houses for sale at your local foreclosure estate agent, in local newspapers, and online both at independent websites and banks’ websites. Independent websites are probably the most comprehensive and the most convenient, providing lots of details about the properties. However, these sites generally ask for a membership fee in order to use their services. The HUD also provides a list of foreclosed houses at www.hud.gov and their site is free to use. HUD houses are foreclosed houses owned by the government, as opposed to being owned by banks. HUD houses are often sold at cheap prices, but preference is given to owner-occupants and in the first 10 days of the house being put on sale, only bids from potential owner-occupants will be considered. After that period, if no bids are accepted, offers from the general public and investors are considered. You may also qualify for FHA-insured loans, especially if you are buying your first house.

Foreclosed houses typically sell at 10 to 30% off, but discounts of up to 60% or more are not uncommon. However, keep in mind that price is not everything. A heavily discounted house is usually so for a reason. Generally cheap houses will need lots of repairs, and the cost of this can be significant. If the house has been empty for a long time, problems such as burst piping, clogged drains, and mouldy walls can occur. Foreclosed homes are sold without any warranty of condition, and you will be purchasing them as is. That is why it is extremely important to do extensive research on the house before committing to a buy, even if the price seems too good to be true – especially if the price seems too good to be true!

If you know what to look for, and if you get professional opinions from home inspectors, surveyors and agents, you can find some cheap houses for sale which are very good deals. Indeed, many investors have made a fortune by flipping such houses. If you are buying a house to sell, you have to consider cost of repairs and re-seller potential, including current demand at that location and factors such as the quality of the neighbourhood.

Cheap Houses for Sale is a post from: Buying Foreclosed Homes

Cheap Houses for Sale is from Buying Foreclosed Homes

Banks own a lot of foreclosed homes because they seize these when mortgages fail to be paid. However, banks have no use for property and therefore try to sell these off as quickly as possible. The Bank of America has an online free list of foreclosed homes at http://foreclosures.bankofamerica.com/ and you can search by location, price range or size. Branch Banking and Trust is another bank with an online free list of foreclosed homes (http://www.bbt.com/applications/specialassets/search.asp?p=1). Their list is fairly extensive as they have recently taken over a number of smaller banks.

Citimortgage – Citibank is another bank providing free listing of foreclosed homes (https://citimortgage.res.net/). Their website also provides homeowner assistance with useful information on avoiding foreclosure and home buying tips.

Fifth Third Bank has foreclosed properties mostly in the states of Michigan, Florida, Ohio, North Carolina and Indiana; and if you are looking for foreclosed homes in these locations you should check out the online listing at: http://reo.53.com/ Fifth Third Bank also provides special funding options on some properties through the Fifth Third Mortgage Scheme.

Flagstar Bank provides a free list of foreclosed homes at https://www.flagstar.com/personal/borrowing/home-loans/reo-properties-for-sale.html; however, not much detail about the properties is given. They don’t even provide pictures of the properties – you have to contact the management company and request for more information. Similarly the U.S. Bank only provides price and address on their list of foreclosed homes: http://www.usbank.com/cgi_w/cfm/personal/products_and_services/reoPropertiesReq.cfm. Same thing for GMAC Mortgage – only the bare details are provided on their list: http://www.gmacmortgage.com/apps/reo/bank-owned-properties.htm

Onewest have an extremely good list including not only homes but also mixed commercial properties and land. Their search engine is very fast and they provide pictures for most properties: http://apps.indymacbank.com/individuals/realestate/search.asp

Another place to find a free list of foreclosed homes is the HUD website (www.hud.gov). The homes on this list are known as “HUD Homes”, because instead of being owned by banks they are owned by the government (the HUD). However the processes of finding and buying an HUD homes is the same as for any other type of foreclosed home.

Free List of Foreclosed Homes is a post from: Buying Foreclosed Homes

Free List of Foreclosed Homes is from Buying Foreclosed Homes

However, there are things you need to be wary during home auctions. Often, you will not have the possibility to inspect the home from the inside, and therefore you will have no idea on the extent of maintenance required or what furniture and appliances are actually in the home. Never assume that the home is in a good condition and remember that foreclosed homes being auctioned are sold as is – any repairs, maintenance or other issues will need to be solved and paid for by yourself.

Before attending home auctions, you should have a clear budget in your head and do not get carried away. Do as much background research about the property as possible, and even if you can’t carry out a home inspection, you should still go and check it out from the outside. Taking a builder and a surveyor with you is a good idea, as they will be able to provide insights into the home just by inspecting the exterior. If the home looks horrible from the outside, chances are it is worse from the inside. If it looks like it has been abandoned for a long time, maintenance required will usually be higher as well. Check windows and doors for signs of break ins. Check the state of the surrounding land/garden and consider how much it would cost to restore to good condition. Peak through the windows. Ask neighbours their opinion – you can gain lots of information about the house from those living around it.

If you do not feel comfortable sitting at an auction, you can get a solicitor to do the bidding for you. If your bid is the winning bid, you will be legally bound to buy the property and pay ten percent of the property price there and then, so make sure you can do this. The remaining amount usually needs to be paid within a month; check your state laws to be sure.

Home Auctions is a post from: Buying Foreclosed Homes

Home Auctions is from Buying Foreclosed Homes

Foreclosed houses generally sell at discounted prices, sometimes up to 60% off although normally at 10 to 30% off. There are two main reasons for this discount. One is the fact that the lender (usually a bank or the government) has no use for real estate and wants to get back their monetary investment as quickly as possible. Therefore they price the houses at a discount to encourage a quick sale. It is in fact common that foreclosed houses sell in the first 10 days of them being put up for sale.

Secondly, there are some potential pitfalls associated with buying foreclosed houses, and the discounted price is meant to balance these. The main pitfall is that foreclosed houses tend to require repairs, especially if they have been vacant for a while. Foreclosed property is sold as is, and all the repairs required will need to be paid for by the buyer. Generally, the more extensive the maintenance needed, the larger the discount. In addition, persons buying foreclosed houses will not have the chance to talk to their previous owners, and therefore there is no way of knowing about recurrent problems or issues with the house. Some things may not be apparent, even if you visit the house. It may look fine in summer, but you may discover that the roof leaks when it rains. Or maybe the house is very energy-inefficient and it costs a lot to keep it heated.

However, if you do your homework, and are willing to wait until a very good offer comes up, you can get very good deals from house foreclosure sales. Some investors have made a fortune by buying foreclosed houses at very cheap prices, carrying out the necessary maintenance and selling them refurbished at a profit. Start looking at foreclosed house listings from today, and note the price patterns in the area you are interested in. You should also enlist the help of an agent to help you identify the good deals and get a professional home inspector to visit the house with you. Remember that once you buy the house, you cannot file any claims for damages or issues you may discover as you have bought it as is. Proper research before the sale is tantamount.

House Foreclosure Sales is a post from: Buying Foreclosed Homes

House Foreclosure Sales is from Buying Foreclosed Homes