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  • Will You Add? - When Should You Buy Foreclosed Properties?

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    ly eager to get rid of the balance due and to move on, you can often complete the entire deal much quicker than you would with conventional property purchases.

    Although the list of advantages is impressive, there are a few potential downsides you should keep in mind before buying at the pre-foreclosure stage.

  • Homework, Part 1: What is owed? – When you buy the home, you are going to be taking on all of the debt connected wit
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    There are quite a few potential advantages to purchasing foreclosed property, namely buying property at lower than market value and being able to move in more quickly to name just two. The trick comes in figuring out the best time to make that real estate purchase. We'll look at the advantages and drawbacks of buying properties at different stages in the process so that you can make an educated decision.

    The Pre-Foreclosure Stage

    Early on in the foreclosure process, you'll be working together with the current owners of the property to come to an agreement that will allow you to take ownership of the property. There are a number of plusses to making your purchase at this point:

  • Purchase agreements that are negotiable – Instead of having to deal with real estate agents and others who are concerned about their commissions, you will be negotiating directly with the property owners. This means you have much more flexibility regarding the agreement.
  • Reduced purchase price – Because of the bad situation in which the prior owners have found themselves, you may be able to buy the property for much less than it is worth. Prices that are significantly below property's market value are normal at this point because the owner usually just wants to get out from under the debt on the property quickly and is less concerned with making a profit on the property.
  • Lower Down Payments– Often, lenders ask for a 10% down payment on non-foreclosure properties. By purchasing a property during pre-foreclosure, this can be reduced dramatically. Sometimes you can even buy with no money down, depending on how quickly the owner wants to get rid of the property and the debt.
  • Faster Closing Times – Because the property owner is probably eager to get rid of the balance due and to move on, you can often complete the entire deal much quicker than you would with conventional property purchases.
  • Although the list of advantages is impressive, there are a few potential downsides you should keep in mind before buying at the pre-foreclosure stage.

  • Homework, Part 1: What is owed? – When you buy the home, you are going to be taking on all of the debt connected with
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    rly on in the foreclosure process, you'll be working together with the current owners of the property to come to an agreement that will allow you to take ownership of the property. There are a number of plusses to making your purchase at this point:

  • Purchase agreements that are negotiable – Instead of having to deal with real estate agents and others who are concerned about their commissions, you will be negotiating directly with the property owners. This means you have much more flexibility regarding the agreement.
  • Reduced purchase price – Because of the bad situation in which the prior owners have found themselves, you may be able to buy the property for much less than it is worth. Prices that are significantly below property's market value are normal at this point because the owner usually just wants to get out from under the debt on the property quickly and is less concerned with making a profit on the property.
  • Lower Down Payments– Often, lenders ask for a 10% down payment on non-foreclosure properties. By purchasing a property during pre-foreclosure, this can be reduced dramatically. Sometimes you can even buy with no money down, depending on how quickly the owner wants to get rid of the property and the debt.
  • Faster Closing Times – Because the property owner is probably eager to get rid of the balance due and to move on, you can often complete the entire deal much quicker than you would with conventional property purchases.
  • Although the list of advantages is impressive, there are a few potential downsides you should keep in mind before buying at the pre-foreclosure stage.

  • Homework, Part 1: What is owed? – When you buy the home, you are going to be taking on all of the debt connected wit
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    property owners. This means you have much more flexibility regarding the agreement.
  • Reduced purchase price – Because of the bad situation in which the prior owners have found themselves, you may be able to buy the property for much less than it is worth. Prices that are significantly below property's market value are normal at this point because the owner usually just wants to get out from under the debt on the property quickly and is less concerned with making a profit on the property.
  • Lower Down Payments– Often, lenders ask for a 10% down payment on non-foreclosure properties. By purchasing a property during pre-foreclosure, this can be reduced dramatically. Sometimes you can even buy with no money down, depending on how quickly the owner wants to get rid of the property and the debt.
  • Faster Closing Times – Because the property owner is probably eager to get rid of the balance due and to move on, you can often complete the entire deal much quicker than you would with conventional property purchases.
  • Although the list of advantages is impressive, there are a few potential downsides you should keep in mind before buying at the pre-foreclosure stage.

  • Homework, Part 1: What is owed? – When you buy the home, you are going to be taking on all of the debt connected wit
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    is less concerned with making a profit on the property.
  • Lower Down Payments– Often, lenders ask for a 10% down payment on non-foreclosure properties. By purchasing a property during pre-foreclosure, this can be reduced dramatically. Sometimes you can even buy with no money down, depending on how quickly the owner wants to get rid of the property and the debt.
  • Faster Closing Times – Because the property owner is probably eager to get rid of the balance due and to move on, you can often complete the entire deal much quicker than you would with conventional property purchases.
  • Although the list of advantages is impressive, there are a few potential downsides you should keep in mind before buying at the pre-foreclosure stage.

  • Homework, Part 1: What is owed? – When you buy the home, you are going to be taking on all of the debt connected wit
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    ly eager to get rid of the balance due and to move on, you can often complete the entire deal much quicker than you would with conventional property purchases.
  • Although the list of advantages is impressive, there are a few potential downsides you should keep in mind before buying at the pre-foreclosure stage.

  • Homework, Part 1: What is owed? – When you buy the home, you are going to be taking on all of the debt connected with that property, so you need to make sure that you know what you are signing up for. A case in point would be that if the prior owner has taken out a second mortgage or if the house is being used as security for another debt that has not yet been paid, you may end up owing additional money.
  • Homework, Part 2: Finding a home – The biggest challenge can simply be finding a pre-foreclosure home that you want. Legally, the lender must submit a Notice of Election and Demand (NED) into the public record before foreclosing on a home. You can sometimes find these NED's on lenders' websites or by checking the public record section of your local newspaper. You can also go to your courthouse and search for the records by hand, but this is extremely time-consuming and usually not very fruitful.
  • Homework, Part 3: Coming to an Agreement – Sometimes dealing directly with home owners can be easier, but sometimes reaching an agreement may be difficult. Make sure the property owner is serious about selling the property and willing to negotiate. Otherwise, it is not going to be worth your time and money.
  • The Foreclosure Auction Stage

    When a property gets to this point, the bank has already foreclosed on the mortgage and owns the property, and the time for bargaining with the owner is over. Auctions are one of the most usual ways for potential buyers to locate properties, usually because of the following advantages:

  • Auctions are Easy to Locate – Unlike pre-foreclosure properties, auctions involving foreclosed property are pretty simple to find. They are often advertised online, in newspapers, and sometimes even on television. You can also get in touch with some lenders to find out when and where auctions will be held.
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