Foreclosed homes are regularly set on the market by the two major home lenders: government agencies and banks. Be they government foreclosures or bank foreclosures, what matters most is that they can be purchased at expenses lower than their real market value. This is why homebuyers or investors generally are in haste as soon as a reliable foreclosure opportunity is listed. After having investigated the real estate market and its potentialities, homebuyers must move quickly if they want to grasp this temporary chance. In what follows we will see some of the basics and advantages of opting either for government foreclosures or for bank foreclosures.

The most popular government agencies that frequently market foreclosure properties are as follows:
1) the U.S. Department of Housing and Urban Development (you are probably already familiar with HUD foreclosed homes);
2) the U.S. Department of Veteran Affairs (for the well-known VA foreclosures); 3) local agencies of taxation;
4) the Federal Deposit Insurance Corporation (FDIC – the department dealing with foreclosure sales);
5) the Internal Revenue Service (IRS – once again the segment dealing with foreclosures).
However, the market of government foreclosures is led by HUD foreclosures and VA foreclosures.

In any case, the point is that with government foreclosures one of the above mentioned government agencies is holder of the property’s title. As a rule, they will place any foreclosed property at auction. The buyer’s advantages are basically drawn from bidding opportunities generated by auction circumstances: the potential buyer’s chance to set a limit for the house value, the certainty over the time interval spent to acquire a property, the possibility to evade prolonged negotiations with the former homeowner. As with any auction, government foreclosures are purchased if the bidder’s offer is appropriate. Also, your involvement in government foreclosures auctions needs to be mediated by a certified real estate agent who is regularly rewarded a 6% bonus for having successfully sold the property. The real estate agent’s indemnity is an additional figure to the sum you place as a bid.

To what concerns bank foreclosures, there are three major ways of purchasing such properties. One of them is in pre-foreclosures. In this case, you will need to act promptly, because there is actually very little time up until a property in a pre-foreclosed stage is transferred to foreclosure terms. So before properties actually become bank foreclosures, the active, smart homebuyer/investor – who has previously undergone a serious investigation of an area’s real estate market – will know to move in the direction of negotiating directly with the distressed homeowners. If pre-foreclosure attempts fail, the next step is an auction.

With bank foreclosures, the auction is required by the banks whose lends haven’t been acquitted on time. In such circumstances, the homebuyer/investor could try to overpass the bank’s bidding offers. Yes, the bank will also bid in such auctions, interested in stepping further along the process of profitably selling foreclosures. If the auction is won by the bank, the property becomes an REO (real estate owned) foreclosure property. This is the third way in which you could purchase bank foreclosures. When you are interested in REOs, you will negotiate directly with the bank. The main advantage of the potential homebuyer/home investor is that this is the most certain manner (and one of the fastest) of acquiring a foreclosed property. You will need to make an offer, but be careful: the offer should be commonsensical, don’t expect a bank to accept a discount of 50%, even if we are talking about foreclosures. Most often, you will get a 10%-20% lower price for an REO foreclosure.

In the end, the key toward purchasing foreclosures, no matter the entity selling them, is given by two stages:
careful real estate market investigation and promptness in action when the time comes to place your offer.
Remember that the market of foreclosures, no matter how advantageous, is highly competitive, since many homebuyers/investors are interested in it.

About the author: The above Real Estate information on Buying Government Foreclosures or Bank Foreclosures: Basics was provided by William Henderson, a Florida Licensed Real Estate Agent with over 15 years in the Banking, Finance and Real Estate related fields. William can be reached by email at whenderson586@gmail.com or by phone at 786-346-5611. You can also check the website http://www.foreclosuredump.com for up to date properties for sale in your area.

 

Thinking of short selling your home? I can help get the process done!

 

I service the following area of Miami Dade County: Miami Beach, Brickell Area, Downtown Area, North Bay Village, Normandy Isle, Surfside, Sunny Isles.

07.14.10 By Credit.com Staff

In an effort to find more affordable home prices, more Americans turned toward foreclosures during the first quarter of 2010, according to a new report. The study - conducted by foreclosure listing and information website Foreclosure Deals - reveals that 31 percent of home sales during the first three months of the year were for homes whose previous owners defaulted on their mortgage loans.

The total number of foreclosure home sales during the first quarter is 33 percent lower than those sold during the first three months of 2009. A combined total of 232,950 foreclosed homes were sold in January, February and March. Lower sales prices are one of prime reasons consumers turn toward a foreclosure, with the average price being 27 percent lower than a traditional home during the first quarter of 2010.

"Buyers are attracted to foreclosures because they offer tremendous discounts," Foreclosure Deals business analyst James Foxx said. "The numbers show that each year, the total number of foreclosures sold has increased, and that's not just a reflection of supply. They're very popular, and for good reason, there's no better investment value in real estate currently out there."

Statistics reveal that foreclosure home sales have increased by 320 percent overall since 2007.

Many lenders, such as Fannie Mae, have implemented programs and created help centers to assist borrowers and try to reduce the incidence of foreclosure. But as unemployment rates remain high and the backlog in repossessing foreclosed properties may be skewing the real amount of Americans who have defaulted on their mortgage, it is unlikely that recovery will come as quickly as many individuals hope.

If you have been paying attention to the nightly news recently you are aware that there are many foreclosures available in every state and every price level. The current economy has produced a scourge of empty and foreclosed homes.  Foreclosures occur when the current homeowner is unable to make their monthly mortgage payment and the bank is forced to take the property back.  This can be a great opportunity for investing in foreclosures.

The reason why is because while the real estate market may currently be in a downward spiral, people will always need a place to live and the market will not stay down forever.  Think about this.  The investor’s maxim is that you buy while the prices are low and sell when the prices are higher.  The fact of the matter is that right now real estate is “on sale”.  Now is the time to buy.

There are various ways to purchase a foreclosed property, which we will go over here.  First off is a pre-foreclosure sale.  This is a sale that occurs when a lender allows the homeowner who is delinquent in their payments to sell the home and pay back the lender from the proceeds of the sale.  Oftentimes the house will sell for less than the homeowner owes on the note and in that case it is referred to as a “short sale”.  There are many “short-sale” opportunities available right now in every city.  Your local realtors with the MLS can help you search them out or you can get a bank foreclosure list.

A second way to purchase a foreclosure property is through a foreclosure auction. The auction is usually held at the local courthouse of the county where the property is located.  The property is sold to the highest bidder and often the price is very reasonable.  Investors can often see a good profit margin when they purchase from this type of sale.  One thing to be aware of though is that these properties are generally sold “as is” and the buyer is not able to make inspections.  Any and all repairs will be the responsibility of the buyer.

After the bank forecloses they will try to sell the property themselves.  Usually they just want the get the property off from their books and they will drop the price until the property sells.  This is often a way to get a really good price on a property.  Also, many times the bank has made some of the necessary repairs to sell the property.  Even so these homes are still sold “as is” but in this case the buyer will be able to make the necessary inspections.
 

Whenever you purchase real estate you should do your own due diligence and independent research to make sure that the property is appropriate to meet your needs.  You also need to make sure that you have the funds available through your own cash fund or from financing.  This will make sure that your purchase goes as planned.

But as a savvy investor buying real estate right now makes sense because right now in this current economic climate, real estate is “on sale”!
William Henderson 786-346-5611 a Florida Licensed Real Estate Agent