Buying Foreclosures — How Foreclosures Work

Home buyers who want to save money by purchasing a foreclosure often envision a quaint little house that is owned by a down-on-her-luck widow, but experts say the reality is often quite different. Sellers rarely go into foreclosure voluntarily, and may stop making payments for a number of reasons, including: Laid-off, fired, or quit job; inability to work due to a physical condition; mounting debt obligations; divorce; or job transfer to another area. Investors who seek out homes in foreclosure often choose to buy these properties before the foreclosure proceedings are final. Before negotiating with a distressed seller, consider: Foreclosure processes vary between states; almost every state gives the seller an irrevocable period of time during which to emerge from foreclosure and regain control of the property; many states also require that buyers provide sellers with certain disclosures pertaining to equity purchases; and finally, determine whether you are the kind of person who can easily take advantage of someone else’s financial distress, and/or potentially put a family out on the street. | Read More