Young First-Time Buyers Are Saving for Their Dream Homes Young buyers (Millennials & Gen Z) have waited longer than previous generations to enter the housing market for their
A Quick Understanding Of Foreclosures
Many home buyers see a foreclosure as an opportunity to find a great home for a bargain price. While foreclosures can offer some nice discounts, understanding how foreclosures work and how this affects the buyer is critical to ensure you are getting a good deal and not a disaster.
What is the difference between a Pre-Foreclosure and foreclosure?
First, it’s important to understand what qualifies as a pre-foreclosure. A pre-foreclosure is a home that the current owners have defaulted on the mortgage for a period of time. The bank or lender begins proceedings to correct the debt. The owner has an opportunity to make their mortgage correct through any type of options the bank or lender has available. (Despite what some people think, a bank or a lender does not want your house. They would rather work with the owners to structure an opportunity for the owner to remain in their home).
On the other hand, if the owner is unable to correct the past due debt the home goes into foreclosure. A foreclosure is a property which has been taken back by the lender in order to satisfy an unpaid mortgage debt. It is owned by the bank or lender and they will proceed with auctioning off the home to the highest cash bidder. If the home is not sold at auction, the lender or bank will team up with a real estate agent to sell it following normal selling practices.
Can I save money buying a foreclosure?
Yes and no! It’s true that lenders do not want to hold onto their foreclosed properties longer than they need to, but they also understand the value of the home in its current condition. While deeply distressed properties might be listed at very low prices, good homes in decent condition might not be listed below comparables in the same area. These homes will be sold sight on seen, therefore, you will not be able to do an inspection on the home which could end up requiring costly repairs.
Is the buying process different from a traditional sale?
The process is different in the fact that these homes are purchase sight on seen through an auction house. The differences lay in the protections and opportunities for negotiation during the process. Most foreclosures are sold “as is” and the bank or lender will not negotiate repairs of any kind. There could also be clauses which remove other contingencies such as appraisal. The buyer needs to read the agreement very carefully. Buying a foreclosure can be a great way to find a nice property at a discounted price. Not all properties are a good deal, however. Understanding the foreclosure market and reading the contracts very carefully is the key to buying a foreclosure – this way you get the most home for your money without buying a problem.
The Sam Barnes Realty team are leading experts in the foreclosure process. If you are interested in a foreclosure or would like to learn more about the process, please reach out to one of our team members and we will be happy to answer any of your questions.
Jason has lived in the Golden and Arvada area for more than 25 years attending Golden High School and then later gaining a Bachelors of Science Degree in Organizational Leadership and Emergency Manage....