Foreclosure Buying Process
Foreclosure is a process that allows a lender to recover the amount owed on a defaulted loan by selling or repossessing the property securing the loan. Below are some tips for purchasing a foreclosure in St Petersburg or anywhere in Tampa Bay.
Get an estimate of what you can afford, which enables you to act quickly once you locate a property that interests you. If you approach an owner or foreclosing lender with secured financing, it shows you are serious and ready to buy.
If you’ve never purchased a foreclosed property before it’s beneficial to contact a local real estate agent. Their professional knowledge of the market can help guide you through the process of buying a foreclosure.
There are several ways to purchase a foreclosure. Either you can contact the owner pre-foreclosure, purchase it at a public auction, or purchase it through the lender (either the bank or government).
Buying a property in a pre-foreclosure state allows the buyer time to research the title and condition of the property and can allow the owner/borrower a chance to walk away without a bad mark on their credit history. Purchasing a home in this stage can be difficult because the owner will most likely be in a fragile state. But if you do your research of comparable homes in the area and submit your research along with your offer to the seller, this will increase your chances.
To avoid direct contact, another option is to purchase the property through a short sale. These homes are put on the market with the help of a real estate agent at a price lower than what the owner owes. The only drawback to this is that you’re now competing against everyone else who saw the listing.
If a loan is not reinstated by the end of the pre-foreclosure period, the bank sues to repossess the house where potential buyers can then bid on the property at a public auction. This can usually offer the best price but doesn’t give the buyer time to research the title or home, and requires they pay a nonrefundable deposit. If the buyer has the time and is an inexperienced bidder, it’s wise to attend a couple of auctions beforehand so as to come better prepared.
The last stage of the foreclosure process comes after the homeowner is evicted and is known as post-foreclosure. The bank then hires a real estate agent to place it on the market. These homes are often listed as lower than what was originally owed on the mortgage, but has little wiggle room to go down, and with many of them abandoned and unkempt, these properties will often stay on the market for months. A buyer’s best bet here is to again do the research and present this along with a fair offer.
Figure out which stage would be best for you to enter when purchasing or investing in a foreclosure. To increase your chances of success, it’s important to pick one and become an expert in that particular process.
This article was brought to you by Tom Miller of New Home Source on behalf of BDX. Funded and endorsed by a consortium of the top US homebuilders, Builder’s Digital Experience LLC (BDX) is the first national home marketplace focused specifically on the new home market. A newly constructed home offers consumers a wide selection of styles, locations, options and features that aren’t available in existing homes. BDX’s network of websites, including NewHomeListings.com provides prospective homebuyers with the most comprehensive information and selection of new homes available on the Web.
BDX is a joint venture of Move, Inc. and Builder Homesite, Inc. and is headquartered in Austin, Texas. Builder Homesite, Inc. was formed by a consortium of the nation’s premier homebuilders to improve and enhance the home ownership experience. To learn more about BDX or Builder Homesite, Inc. or the consortium, please visit www.theBDX.com or www.builderhomesite.com.