Month: August 2008

Why the internet has expanded the foreclosures market

Why buying an ugly foreclosure makes sense.

There are few people who have not heard of the foreclosure market in house-buying. Legend tells of fantastical deals being uncovered where houses needing only a coat of paint have been bought directly from lenders for a few dollars and are then resold a matter of weeks later for $100,000. This may or may not be the truth but the reality of the foreclosure market today means that profit margins of this magnitude are unlikely to be found.

Foreclosures – hard work pays off

Are foreclosures really more bang for your buck?

Is there such a thing as a safe deal in foreclosures?

Risks abound in the foreclosure market. Not only are the buildings themselves sometimes a bit shaky, the processes that have been set up to sell them can also produce some shaky results. Some options are safer than others, however but the discounts may not be what they were.

When pestering can pay off in foreclosures

Purchasing foreclosure properties is not for the faint hearted or the work-shy. To get a really positive result you need to be in the mood to research your subject thoroughly and get to know all of the players. This is a situation where persistence can pay off handsomely.

When is the right time to buy a foreclosure?

Because foreclosure sales are usually structured to give no one person an advantage over anyone else and whether they are open auctions or sealed bid auctions, it seems that timing, other than placing your highest bid at the right time, is immaterial. Of course this is only true if you accept the conventional process for buying foreclosures. There are other techniques where timing is everything.

Foreclosure buying checklist

Buying foreclosures can look very complex compared with conventional house-buying but there is no reason why someone with limited knowledge of the process can’t take advantage of this prime source of bargain properties.

1. Prepare to act quickly

Is the US SBA a good source of foreclosures?

The US Small Business Administration (SBA) manages loan programs to encourage business start-ups across the country. This involves them in a guaranty of up to 85% of the loans that applicants organize with lenders. Because a large proportion of new businesses fail in the first two years of operation, this leaves the SBA with a number of defaulters on loan payments and, as a result, all types of properties including land, business premises and family homes may be seized as part of the foreclosure process.

Will the title of a foreclosure always be free from liens?

Foreclosure property sales are becoming increasingly attractive to homebuyers and to investors alike. The potential to pick up a bargain at between 50% and 90% of market value is enough to encourage normally sober and sensible people to step out onto a limb. However, by their very nature, foreclosure properties are rarely simple purchases and there can be a problem with liens on the title.

Is buying a pre-foreclosure a good idea?

Most people have heard about foreclosure properties where owners have defaulted on their mortgage payments and the lender has seized the property as security on what remains of the loan. These properties are then placed on the open market, often at a discount because of their condition and to attract a rapid conversion into cash. A pre-foreclosure is where the mortgagor who is in default and has been served with a notice to foreclose undertakes to sell the property himself or herself and use the proceeds to satisfy the debt.