When a borrower can no longer pay their mortgage loan and defaults on the terms of the loan, the bank takes possession of the home. This is known as foreclosure, and has become increasingly common in the United States over the course of the past few years. Foreclosed and soon to be foreclosed on homes can represent a unique opportunity for home buyers.
Homeowners in default or who are in danger of being in default may try to sell their home before it enters foreclosure. This is known as a short sale. Negotiations take place with the seller once the offer is made, and then the offer is sent to the bank which reviews it for up to 60 days. If the bank accepts the terms of the sale, the advantage to the buyer is that the price they will pay will be less than the asking price of the home.
When considering purchasing a foreclosed or soon to be foreclosed home, it is important to remember that these homes are sold in as is condition. In other words, you owe it to yourself to have an inspection performed on the home to check for major damage and structural repairs that may be present before you enter into a short sale agreement.
Sometimes, however, buyers are not allowed to inspect the homes before purchase, so it is important to be very clear about the terms of the sale before entering into it. Short sales can also take some time to process, depending on the bank, the seller, and various factors.
To find out whether or not a particular home is a good deal for you, be sure to check the public records before making an offer to purchase a home. It is important to hire a real estate agent with experience handling foreclosures and short sales. The right agent can handle negotiations and help to protect your interests and guide you through the buying and negotiation process. Your real estate agent can find out whether or not a foreclosure notice has been filed, and how much the lender is owed. This will help you to determine how much you should offer.
Even with the inherent risks, foreclosed home short sales offer buyers the opportunity to purchase homes significantly below market value, and can sometimes allow sellers to avoid the foreclosure process at the same time. Be sure to do your research, and weigh your options carefully before entering into any type of real estate purchase.
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Article Source: http://EzineArticles.com/?expert=Tom_Tillman
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