Buying Foreclosures In A Real Estate Recession
Across the country, Americans are watching the recession fall before their eyes. Itís getting harder and harder for people to pay their mortgages and as a result, the number of foreclosures is skyrocketing.
The residential real estate market effects the entire country. When it crashes, it is just like the stock market crashing. Everyone suffers. The only people who do well are bankruptcy and divorce lawyers and doctors, who are always needed. Car repair shops tend to also do better in a down economy as people tend to fix old cars instead of buying new ones. Everyone else gets hit really hard. The crash of the residential real estate economy triggers a domino effect and the dominos are already starting to fall down.
You can count on seeing a lot more foreclosures on the market. Foreclosures are usually located in blighted areas during times when the market is prospering. Now you can see foreclosures just about anywhere, even in upscale neighborhoods. A foreclosure occurs when the owner of the property can no longer pay their mortgage and the bank takes over the property. The owner is evicted and the bank or lender sells the property to someone who will cover the cost of any debt due. Banks and mortgage lenders do not want to keep the properties so they are willing to let them go as long as they get any monies they put out for the mortgage.
Buying foreclosed property is not hard. You have to have cash ready as well as a certified check for the down payment. You have to be able to prove that you can afford to finance the house so you will have to either show proof that you have the money for a cash sale or a pre-approval letter from a mortgage company. You will also bid on the property along with other people. You should not be discouraged if you get turned down. If you continue bidding on foreclosures, you will eventually get a property and you can then fix it up and rent it out to a tenant. You can hold onto the property until the residential real estate market turns around and it becomes a sellers market. This will be noted when the demand for housing is greater than the supply and will cause the value of the homes in your area to rise significantly.
You can get a list of properties in foreclosure in your local county courthouse. This process has to go through the court system. An owner must be evicted by the sheriff and the sale of the property must be public knowledge. Anything that goes through the court system is kept in record.
Real estate agents have a list of homes in foreclosure. These are owned by banks and lenders and this information is also of public record. If you are working with a real estate agent, they should be able to show you the homes in your area that are in foreclosure. Be advised that these homes have already been looked at by savvy investors before they came on the market and make a better long term investment, or a home in which you plan to live, than a home that can be fixed and sold quickly.
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