The foreclosure process as applied to residential mortgage loans is a bank or other secured creditor selling or repossessing a parcel of real property after the owner has failed to comply with an agreement between the lender and borrower called a "mortgage" or "deed of trust." Commonly, the violation of the mortgage is a default in payment of a promissory note, secured by a lien on the property. When the process is complete, the lender can sell the property and keep the proceeds to pay off its mortgage and any legal costs, and it is typically said that "the lender has foreclosed its mortgage or lien."
Buying a foreclosure can be a great way to get a home for less, whether you're planning to live in the property or rent it out. The supply of foreclosures certainly isn't going to dry up soon, which means plenty of opportunities for home seekers and investors.
Some banks slash a property's price for a quick sale, which means you'll get the house for less than comparable homes in the area. Other banks don't offer much, if any, discount, and intense investor interest in a property can lead to a bidding war that drives up the price.
"The first and arguably most important issue to consider when looking for a bargain-basement buy on a foreclosed home is the property's condition. Most residents of foreclosed homes are none too happy about their eviction, and many physically take out their discontent on the house itself. Missing plumbing, holes in walls and broken appliances are all common, and as many as half of all foreclosed properties have major damages from a former owner. Even if there's no intentional damage, foreclosing on a home is a lengthy process -- often taking a year or longer -- so it's pretty much guaranteed that the property hasn't been properly kept up for at least 12 months. You're going to have to move fast to secure a property, leaving little time for a proper home inspection. In fact, many people buy foreclosed homes at auctions, sight unseen. That's a risky gamble for a company or a wealthy investor, but it can be disastrous for someone who's hoping to make a quick profit by flipping the house or for budget-minded home shoppers."TLC
A short sale is a sale of real estate in which the proceeds from selling the property will fall short of the balance of debts secured by liens against the property, and the property owner cannot afford to repay the liens' full amounts. The lien holders agree to release their lien on the real estate and accept less than the amount owed on the debt. Short sale agreements do not necessarily release borrowers from their obligations to repay any deficiencies of the loans, unless specifically agreed to between the parties. A short sale is often used as an alternative to foreclosure because it mitigates additional fees and costs to both the creditor and borrower.
Definitely! Hiring a professional home inspector can save a great deal of grief for buyers. The one exception would be when the home is new and carries a written warranty by the builder.
Many buyers mistakenly believe that the only reason to have a home inspection is to make sure that the house they are buying does not have defects serious enough to warrant backing out of the transaction. But there is more to it than that.
Certainly, an inspection will usually reveal major problems that may even surprise the seller. The obvious ones are corroded plumbing, antiquated and unsafe electrical, or structural and foundation problems. The discovery of such problems may cause the buyer to re-think his or her offer.
Although a competent inspector can uncover deal-crushing defects, these problems are usually not commonplace. Typically, the seller will already have told the buyer about anything major. More often, inspections reveal less serious problems; problems that may not be serious but can be aggravating.
There is, of course, the possibility that the home inspection will produce another outcome: everything is fine. In this case, the buyer gains piece of mind, confident about the major investment s/he is about to make. That, too, is an enormous benefit for the cost of the inspection.
By asking Adams Realty, friends, or lender. Inspectors are also listed in the Yellow Pages under "Home Inspection Services." But, a word of advice - do not hire a contractor. Contractors earn their living doing repair and renovation work, so their recommendations aren't likely to be as objective as those of a professional inspector.