There is a little myth in regards to where a foreclosure can be located. Most people tend to think that these homes and properties can only be found on the courthouse steps. This in fact is not true.
The truth of the matter is that the actual foreclosure process is a long and drawn out one. An investor has the opportunity to buy a home or property at any stage of this process from pre-foreclosure to post-foreclosure. If you are planning on buying a home that is in pre-foreclosure, there is a great chance that you will most likely be purchasing it from a distressed homeowner. This means that you could probably negotiate a better deal that you would had you been dealing directly with the bank or lender who has taken back the property.
A homeowner in distress will generally give you a much better purchase price because he/she just want to get out of their mortgage payments. Many times you can simply take over their existing loan payments and just give a little money and that is enough to seal the deal.
On the other hand, if you are dealing with a bank or lender, they want their money, as much as they can get from the money that is owed to them. For this reason the asking price for the listing is usually higher. For example, if the amount owed on the mortgage of a home or property is three hundred thousand dollars and home is technically worth only about two hundred thousand dollars, the bank will lean more towards the three hundred thousand dollar purchase price.
Where and when an investor decides to buy is dependant on each investor and they are looking for. Investors that like to take more of a controlling role in the transaction often prefer working directly with the homeowner. Then there are investors that do not want to deal with all of the emotional aspects connected to dealing with the homeowner and he/she losing his/her home so they opt to visit a public auction. Some investors do not do either, and opt to deal solely with the bank or lender who has seized possession of the
home.
Knowing where to look is also key. What is the location that you are interested in? The target area that you select should include all of the criteria and characteristics that you require. Doing your homework and researching will allow you to make a more confident selection to the area in which you will ultimately select to invest. Research can be done online, through public records by visiting the county courthouse, by enlisting the assistance of a local real estate agent, or by simply driving around the neighborhood. Checking with local banks is also a good resource to use when gathering information.
Who an investor decides to negotiate with is again, up to each individual investor and his/her preferences. You have to take into consideration the factors that are involved in regards to anyone you are willing to work with. Dealing with a homeowner will probably include greater financial pressure and may be more of a stressful situation. At the same time, lenders and banks are not emotionally attached to any particular home and they just want to rid themselves it and will generally have a more of a professional transaction to offer an investor.
Disclaimer: All information on this site is provided for informational purposes only! By no means is any
information presented herein intended to substitute for the advice provided to you by any health care or other professional
or organization.
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