When the owner of a home can no longer make his mortgage payments and the lender or bank holding that mortgage repossesses the property, the property is a foreclosure and becomes a
bank-owned (sometimes called REO, real estate owned) property.
Since banks do not want to be property owners, they are often times motivated to sell these properties quickly and at attractive prices to get them off the books, so a lot of people think of foreclosures as good deals; however, there are a few caveats you need to be aware of before jumping into the foreclosure market.
- You can have the property inspected, but most of these properties are sold “as is” meaning that the bank will not make any repairs to the property.
- Often times these properties need a lot of work to make them livable, so if you don’t have the funds readily available to make the repairs this kind of house might not be an option for you, or you might need to pursue an FHA 203K type of loan.
- Sales on foreclosures can take several months to close.
- The bank will not warranty anything regarding the property.
Curious about foreclosure properties that are available? Use our link to search foreclosures for free.
Looking for a good deal that is not a foreclosure? Check out our Best Buys.
Wishing you sunshine everyday and the home of your dreams,
Jeri
