What is a Foreclosure?

A foreclosure occurs when the mortgage obligation is not met and the bank takes over control of the home. In other words,the homeowner was didn't make their mortgage payments for a few months,and the bank that holds the mortgage note is suing them to recover their money.

Why the epidemic of foreclosure homes?

Banks were approving buyers for mortgages that they could not handle. Many of these loans were "ARM" or Adjustable Rate Mortgages,where the interest rate would skyrocket after a couple of years,leaving these homeowners inable to make their monthly payments

Foreclosures have added many affordable homes to the real estate market.

Many of the foreclosure homes you see on the market are actually in "pre-foreclosure". The bank is giving the opportunity to the homeowner to sell the home before the home is foreclosed upon,and goes to the "steps" for auction. Buying a foreclosure home at auction requires more strict buying guidelines,such as money down and the ability to close quicly.

More frequently,the bank will accept a "short sale" meaning they will accept a lower offer than what the homeowner owes on the home.

A large number of inexpensive homes on the market are "pre-foreclosure".

Does that mean you'll get a "deal"?

Not necessarily. Banks require that homes be priced according to the market,to assure they are receiving as much of the loan as possible. They will even send their own appraiser to guarantee the home is being offered at fair market value.

Some agents price a foreclosure home ridiculously low, just to test the waters because they don't know exactly what the bank will take. A foreclosure split in Oceanside that was on the market for $395,000 eventually went in the high fours.

Since a foreclosure home is usually neglected and in a state of disrepair,the price usually reflects that status. A buyer can find homes in the same condition,that are in the foreclosure process for the same price.

Making an offer on a foreclosure home is a bit different than choosing one that is still owned by the seller. The bank requires the usual paperwork in writing,and also might request a credit report. This information is faxed directly to the bank. The homeowner is not involved in the process at all. No offer is presented to the homeowner,so instead of receiving an answer anywhere from a few minutes to a day,the buyer might not get a response to the offer for weeks. The offer must pass through many different hands as required by the bank.

There are too many foreclosures to list here! Also there are more in some towns than in others. If you are looking for an inexpensive home,that needs a little tender,loving,care,give me a call anytime at 1-866-450-MATT(6288)

Want more information about foreclosure homes in your area?