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Foreclosure on Real
Estate
Real Estate Foreclosure and distressed properties can be
excellent investments and great bargains as they are usually sold at far
less than market value.
There are many ways to acquire this type of real estate at discounted
prices. All types of sales except a trustees sale allow you the ability to
use a title or escrow company.
Owner Default
When a property or real estate owner fails to make the payment(s) to the
holder of the note or lender, the defaulted on holder of note records a
notice of default. Then, after a period of three months a notice of sale
must be published in a local paper, once a week for three weeks just prior
to the sale.
Delinquent Seller
The simplest way to buy properties under fair market value is when the
delinquent (not defaulted as above) owner is discovered. The delinquent home
owner will not have made recent payments of principal, interest, taxes or
insurance and may have even reduced the value of the property due to lack of
maintenance. When the delinquent owner realizes that he will be unable to
meet the commitments on promissory notes and trust deeds, he may choose to
sell his property at a discounted price rather than proceed through the
foreclosure process.
Trustee's Sale
Most foreclosure buyers prefer to acquire their properties at a trustee's
sale. This makes it possible to make property and real estate purchases
without being in contact with the defaulted owner or the foreclosing lender.
Anyone with money may make a purchase regardless of credit at this time. A
verbal auction permits the highest bidder to acquire a property by paying
off only the remaining balance on the foreclosing loan regardless of the
fair market value of the property. Buying this type of foreclosure comes
with risk, as you will be responsible for the payment of any liens or
encumbrances against the property as well as repairs that are needed.
These types of foreclosure purchases have their risks, however, great real
estate deals at far below market value are possible at the sale of a
Foreclosure. |
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