With people discovering the gold mine that is foreclosure houses, there are things that you need know so that you can make a well informed decision. There are differences between these houses and normal houses and so expectations should be different too. If you buy a house in the normal way from a real estate agent, you expect to be given the keys to your property the moment the deal is. For foreclosed houses, the expectations are slightly different and you should not listen to the rumors on the streets that downplay these houses.
The truth of the matter is that they are a good bargain and even the slight damage that you may find will more than be taken care of by the large amount you will save and you will have some extra left. Another thing you can expect is that you will receive you deed the moment you make the deal.
When you buy foreclosed homes, you can expect the price to be way lower than what similar houses are going for in the market. You can also expect these deals to be safe because the houses are being sold by either the government or the bank or whoever the lender may be. This is said to be safer because if you buy a house from a real estate agent, there is a likelihood of such things as hidden charges, property tax that may have accumulated, etc. But with foreclosure houses especially those by banks and the government, what you see is really what you get.
You can expect lower interest rates, reduced closing costs and a lower down payment and the financing is very flexible, making foreclosure houses to be a good investment.
Before being sold at auctions, foreclosed properties actually pass through the stage of pre foreclosure. Pre foreclosed homes are also offered in real estate listings and selling them actually benefits all the persons involved, namely the seller, the buyer, and the lender. Here are some of the reasons why:
1. Preserving the credit rating of the borrower
Having a foreclosed property is not a good thing to have in any credit report, especially during this present time when lenders are known to implement more stringent rules when it comes to extending credit. Logically, most borrowers faced with the prospect of foreclosure would prefer to sell their homes than have their credit records sullied. Some may even actively market their pre foreclosed homes in the effort of finding a buyer who can actually pay cash or can assume the mortgage loan. Good credit ratings and credit history are important requirements for an average citizen to obtain whatever they seek to have their loans approved by a lender.
2. Getting a good bargain for the buyer
Because of the prospect of getting bad credit history, some owners of pre foreclosed homes even offer discounts to interested buyers. These discounts range from 10% to 35%, which is quite a considerable savings in the part of the buyer. More so, some buyers can even negotiate for low down payments and a payment structure that can be favorable to him. Additionally, pre foreclosed homes are typically well-maintained, unlike foreclosed properties that might have become rundown due to long vacancy.
3. Control the lender’s inventory
Selling a property at pre foreclosure stage also benefits the lender dramatically. This is because the foreclosed properties they have acquired accrue property tax that they need to pay. The lender also has to allocate budget for marketing and maintenance of these properties in order to fetch good prices. These concerns can all be avoided with the sale of pre foreclosed homes. And the lender will have lesser loans that will go on default.
Now you know the advantages of purchasing pre foreclosed homes, go ahead and search for them in foreclosure listings, which typically features this type of property.
There is no other opportunistic time to acquire homes but now. Although the economic downturn and the credit crunch are making cash reserves flow hard, prospective homebuyers and investors could strategically buy homes at very cheap prices. Texas foreclosure homes are particularly discounted at about 20% to 50% off actual home market values.
The law of supply and demand has it that when there is a piling inventory of supply, prices tend to slide. Demand for houses for sale is also slowing due to the now-longstanding housing industry crisis, to rising unemployment and weakening economy. Thus, homebuyers who have spare cash to spend could seize opportunities to purchase Texas foreclosure homes and save significantly on costs. As investments, the acquisitions could be renovated and sold at higher prices in the future or be rented out as there are numerous families out there who have lost homes due to mortgage defaults and consequent home repossessions and foreclosures.
The number of Texas foreclosure homes for sale will not be always on the rise. According to market data released by property tracker RealtyTrac, the volume of Texas foreclosed homes fell 19.4% in October 2008 year-on-year. That means that the number of homes under foreclosure is slowing, perhaps due to the effect of state government initiatives to control and curtail active foreclosures. About 10,000 homes were foreclosed in Texas in the period, but not all of them are directly and immediately rolled out in foreclosure listings. It will take months before most of those foreclosed homes are declared legally and appropriately for sale. That means there still is pretty much time to snap up Texas foreclosure homes available at very reasonable price tags.