Buying a Foreclosed Home? Know the Facts

Home prices are falling all across the country, but foreclosures are on the increase. According to Realty.com, an online marketplace for foreclosure properties, more than 1.2 million foreclosures were filed in 2006. And industry experts expect that number to continue to rise in 2007.

Losing a home to foreclosure can be devastating for any family. However, foreclosure property can provide a window of opportunity for those in the market for a house. The Better Business Bureau cautions home buyers who want to take this route to homeownership to do some research and know the facts about purchasing foreclosed homes before venturing into this type of deal.

The BBB offers the following tips:

• Know your options. Home buyers can purchase foreclosed properties through pre-foreclosure which allows you to purchase a house directly from the homeowner before it goes into bank foreclosure; at auctions where you will bid against other interested buyers; or properties that are Real Estate Owned, also known as REO.

• Conduct a “title search.” This process can help you find out whether the property has a second mortgage or lien against it. If it does, you may be responsible for paying off the initial mortgage, any second mortgage loans and any liens on the property before you can take ownership.

• Be aware that if you purchase the house in an auction, you may not be able to look inside the home or conduct a home inspection in advance of the sale. Properties sold at auctions are usually sold “as is.” This can create problems when trying to obtain a mortgage loan.

• Obtain help if you need it. Find a real estate agent that is experienced in foreclosures and check them out with the BBB (www.bbb.org). The BBB offers free reliability reports on more than three million businesses.

• Have your agent check nearby or comparable homes to see if the asking price for a foreclosed home is, in fact, a bargain.

• Foreclosure laws vary from state to state so check the laws in your area by contacting your county clerk’s office.

Related Articles

02/10/2012 No deje que una “Retención de autorización” lo esclavice El crédito es una conveniencia; le permite cargar el costo de una comida a su tarjeta de crédito, pagar un electrodoméstico con un plan de pagos u obtener un préstamo para comprar una casa.
02/03/2012 Don’t Let an “Authorization Hold” Hold You Hostage When dining out at a fancy restaurant or spending the night away in a hotel, it’s important to take notice of what the banking industry calls an “authorization hold” on your credit card.
01/11/2012 Buenos propósitos de Año Nuevo: evitar las deudas navideñas comenzando hoy un Club de Navidad Este es el momento de planificar con antelación para que las fiestas de 2012 sean alegres y llenas de felicidad, y no se vean opacadas por deudas inminentes.